Factoring in the cost of inflation

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Mrscreative
Posts: 2119
Joined: Fri Aug 28, 2015 5:06 pm

Re: Factoring in the cost of inflation

Post by Mrscreative »

You also have to consider what the old mortgage rates were. In Canada when we first bought our house (1980), I think we were paying around 18% . It nearly killed us and many people lost their homes when the interest rate shot up.

Dh and I just received notification that our teacher pension payments would increase by 2.1% which supposedly is the annual rate of inflation in Canada. Our pensions increase directly to the rate of inflation.

I think many big box items cost much less now in relation to one's salary.

Creative
littlemiss63
Posts: 2516
Joined: Thu Aug 27, 2015 10:11 pm
Location: Middle Tennessee

Re: Factoring in the cost of inflation

Post by littlemiss63 »

Mrscreative wrote: Wed Jan 23, 2019 12:56 pm You also have to consider what the old mortgage rates were. In Canada when we first bought our house (1980), I think we were paying around 18% . It nearly killed us and many people lost their homes when the interest rate shot up.

Dh and I just received notification that our teacher pension payments would increase by 2.1% which supposedly is the annual rate of inflation in Canada. Our pensions increase directly to the rate of inflation.

I think many big box items cost much less now in relation to one's salary.

Creative
Mrscreative, you are exactly right when we bought our house in 1981 18% was the mortgage interest rate here in the states. Had our seller not worked with us on some creative financing we would never have been able to purchase our house. We had just sunk most of our life's savings into a business. He was in a mess too for he had decided to move his family to another town and had two house payments. He had taken a second mortgage on the house he was selling to buy the new one. We assumed his first 5% loan, paid him cash to pay off the second and he financed the balance for us at 10% to be paid off in 5 years. That was a rough 5 years for us, without a lot of frills, but we made it.
LogicsHere
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Joined: Sat Aug 29, 2015 9:49 am

Re: Factoring in the cost of inflation

Post by LogicsHere »

I've actually used this type of thinking since the mid-80s and use it going forward up to age 99 as well, determining how much things will cost in 10, 20 and 30 years for my retirement planning.
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