81 Comments

as per inflation, if it costs too much, don't buy it

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As I recently turned 50, I realize there's not much use worrying about stuff, including the economy.

We do have an amazing ability to adjust in uncertain economic times.

There is, indeed, less disposable income as everything costs more, but our pay in no way keeps up with this.

During these times, we must learn to appreciate things that don't cost a fortune, attending local events, for example.

Anyway, the more you make, the more you spend so you're not much further ahead if you make more. You just have more expensive hobbies, or you may buy more expensive toys, but you may not even have the time to use them.

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It was only a matter of time. Injecting TRILLIONS of $$$ into the economy caused people and businesses to be more carefree with their money. The stock market and housing market (just to name a few) were running super hot with low interest rates. Sellers were routinely getting above asking prices on short supply. Something had to give, so throw in a pandemic, war, economic policy changes and whala.

Those of us who've been through a recession or two know that it's now a waiting game to see how hard and how long it will last, so tighten down the belt strap a little and reign in some of the discretionary spending and hope that the powers to be course correct in a way to minimize the impact of those who are living on fixed incomes, unemployed, or just struggling to get by.

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Jun 17, 2022·edited Jun 17, 2022

At 57 and being in the construction/contracting business my whole life I have lived through several downturns. 2008 was bad, I had a couple friends go bankrupt. Number one thing is to get rid of as much debt as possible. Fortunately, I am 100% debt-free and not overly concerned about the economy slipping, it always does. I still work part time and have saved and invested for the imminent rainy day.

The older I get I realized time is more important to me than money. We live fairly simple lives below our means but still do anything we want, which isn’t that exciting to lots of people. We’ll all get through this, we always do and life will go on. Cheers!

Edit: The biggest lessons I have learned are:

T

1. Have a skill that is always in demand. I have 4 state licenses for various trades that will ALWAYS be in need 2. No or very easily manageable debt, I can’t say this enough. 3. Live below your means, stop buying stuff on credit if you can’t afford it. 4. Have a good partner with same mindset. My wife and I have been together for 37 yrs and we still like each other.

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I am 68 with enough SS and an annuity to live comfortably. No car payment, very small house payment, married and we both have about the same income. Our strategy is no debt (except house), no extravagance, live simply.

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The economy will be worse before it gets better. I have done without A LOT of things to have a paid for house and truck. Luckily I did away with credit cards years ago, so while feeling a financial pinch right now, won't be a disaster. Just wish I had been a tightwad much sooner.

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I worry less about the state of the economy than how it will affect coming elections.

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When I retired we moved to a better cost of living area (low property taxes) near a progressive city and mountains where we love to hike, living in the foothills where we love to bike, both healthy and inexpensive activities. We could have purchased a home in the same price range but instead downsized and paid cash. No mortgage! The only debt is a zero interest auto loan so we could keep our cash invested.

We are on full SS and I earned enough to max that out at full retirement age this year, just in time for the market nonsense and inflation. We supplement with a small amount from investments and savings. COL adjustments help keep SS relevant. The planning for today began years ago and the strategy implemented along the way is paying off.

You’ve heard the advice to wait out market volatility; it is true. We’ve been through a dust up every 10 years or so. Our investments today are worth less than last year (still more than two years ago) but we only need a small amount today. We have made enough on them in the good times to wait out the bad. Investment balances mean nothing unless you need all the money at one time. It is generally a long game, even when you are retired.

My 2¢:

- save and invest when you are working

- use someone with knowledge to help you manage investments

- manage your borrowing when you are working

- be debt-free when you retire

- develop interests that are healthy and cost effective

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I’m 54 and saw this coming as soon as the government started the multiple rounds of stimulus/money printing. I have paid off my house, cars and all other debt while also putting away cash to take advantage of the stock and housing market corrections.

If you have been living within your means and working hard this recession is an opportunity to gain wealth on the other side.

I remember the late 70’s and early 80’s when 7.5% car loans were consider good rates. We still lived a good life, but we lived within our means.

I’m much more concerned about food shortages in the next year or two than I am about the recession.

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At 61 and a retired teacher, I recall the high interest rates on mortgages if the 1970’s, and the terrible downturn of 2008. I learned that you have to live below your means at all times (not to be confused with complete penny-pinching deprivation), focusing on what is of value to you in the long run. For me, I always saved retirement money, I took my kids on travels (domestic and international), and I refrained from equating my image of myself with the material goods in my possession.

Am I concerned about a current downturn in the economy? Yes, but I think that it will be short-lived, in this case maybe a couple of years rather than a decade.

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Well, dejavu! Bill mentioned 1980. I was an employed adult at that time. I had a min wage job late 70's at around $3.00 hour working retail. I had been used to paying about $1.60 for gasoline. By 1980 I was paying almost $3.00. Gasoline was rationed. Inflation was 15% +/- . It was rough and scary. I didn't know how I was going to make it. I ran up credit card debt to make ends meet. I had an acquaintance at the time that bought a house at 15% . I remember how fortunate I felt when I was able to buy a home ' owner-finance ' at 10% interest. That having been said, these last few months have brought my memories of the late 70's back to life. I have children in their late 40's now. I have brain-washed them to minimize debt no matter how successful they are, to be conscious of gas efficiencies of their vehicles, and you don't need $250 tennis shoes. Most importantly, all you really need is a roof over your head, a car so you can get yourself to work and food on the table; everything this else is just fluff. So to the rest of the world I say, ' just hang on, this too shall pass '.

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I'm worried about where we are going from here. Not just economically, but philosophically as well. We've been bombarded by negativity the last 2-3 years: Pandemic quarantine, the assault on our seat of democracy and now the economy going kablooey. The one commonality among all this was we, as Americans could do nothing about it. I would say that after more than 2 years of sitting around helplessly watching our society disintegrate around us we have grown weary. The next chance we have to feel in control is 2024. I believe change is coming. Maybe not for the better, but definitely change. I'm staying positive and hopeful. As a famous man once said It's better than the alternative.

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founding

If you remember 23c/gal gas, you no doubt remember Whip Inflation Now - another great government plan. Young folks now are "fortunate" to be able to tell their grandkids "I survived the 2022 inflation spiral and market meltdown" (hopefully not recession) just like a few of us can say we survived the Seventies OPEC oil shock and inflation crisis, and the market crashes of 1987 (global), 2000 (internet bubble), and 2008 (housing finance bubble). A non-war badge of honor. A "tuition-free" edumacation. Former Fed Chair Greenspan's "Law of Irrational Exuberance" has not been repealed. But apparently our Federal Reserve hasn't learned yet. Professor Mohammed El-arian said it best yesterday: "We need a more honest Fed."

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Jun 17, 2022·edited Jun 17, 2022

As a pensioner we are pretty much on a fixed income. We started the retirement gig 2 years ago just as COVID was starting. Everything looked dire as our investments dipped and then they roared back. Now we see another substantial dip, but the key concern is inflation. It was estimated by Bloomberg that the average cost caused by the inflation over past 12 months is an increase in costs of some $5,000 a year for a basket of common purchases from food, energy, clothing etc. The problem is that we rarely see those costs reverse itself. Multiply that cost out over next 25 years and we will spend $125,000 more than we would have. Our only hope is that the inflation juggernaut slows down as our income is not multiplying to keep up.

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I'm 63, my hubby 67 and he will be retiring August 1st. I'm beginning to have nightmares thinking about everything financial going on and prices for everything rising so much. We will be losing 2/3 of his income when he retires and will only draw on Social Security at this time (trying not to touch retirement $$ while I'm still working). We still have a mortgage and car payments as our only debt, no credit card balances. We use them (for rewards) and pay them immediately. We have paid $9,000 in credit card debt and our $15,000 equity loan in the last year in preparation for hubby's retirement. I am an excellent cook and baker and make really good bread, freestyle and in the breadmaker. So we will be doing a lot more meal prepping, bread making, canning in the future months to try to sail these rough financial seas.

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After surviving the 2020 riots a little transitory inflation shouldn’t be a problem. Hopefully Putin will ease up on his gas price hike soon.

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