Are You Worried About Inflation?
Inflation is often portrayed in the media as a bad thing, however, it is a necessary ingredient for our lives to operate in a smooth manor. While none of us likes paying more for products, inflation, in and of its self is not necessarily a bad thing. For example, stock market beginners need to know in real estate inflation allows our home value to increase while the payment remains fixed.
The following example shows how inflation can actually be helpful.
Jack and Sue bought a starter home in 1990 for fifty nine thousand dollars. Their payments, including insurance and taxes were four hundred and fifty dollars per month.
In the summer of 2006, Bob and Marie were thinking of selling their home and had it appraised. The value of the home was appraised at two hundred eighty seven thousand dollars. Bob and Marie had a house payment at this time of four hundred and sixty dollars.
In this case, inflation has been helpful to Rob and Mary. Their home is now worth more than when they bought it and the home payment has not made a significant increase.
In the years 2007 through 2009, inflation has dropped and the United States has been in a recession. The value of their home is now one hundred fifty five thousand dollars. The payment is still five hundred and forty dollars. There has been no inflation during these years and the home has lost value, even the home payment has remained about the same.
Runaway inflation is hurtful for most people. For those on fixed incomes, it is especially difficult. However, some inflation helps our lives to flow smoothly.
While we do not want runaway inflation, we do need balanced in inflation. That means that the price of goods will grow slowly along with take home pay and property values. - 23226
The following example shows how inflation can actually be helpful.
Jack and Sue bought a starter home in 1990 for fifty nine thousand dollars. Their payments, including insurance and taxes were four hundred and fifty dollars per month.
In the summer of 2006, Bob and Marie were thinking of selling their home and had it appraised. The value of the home was appraised at two hundred eighty seven thousand dollars. Bob and Marie had a house payment at this time of four hundred and sixty dollars.
In this case, inflation has been helpful to Rob and Mary. Their home is now worth more than when they bought it and the home payment has not made a significant increase.
In the years 2007 through 2009, inflation has dropped and the United States has been in a recession. The value of their home is now one hundred fifty five thousand dollars. The payment is still five hundred and forty dollars. There has been no inflation during these years and the home has lost value, even the home payment has remained about the same.
Runaway inflation is hurtful for most people. For those on fixed incomes, it is especially difficult. However, some inflation helps our lives to flow smoothly.
While we do not want runaway inflation, we do need balanced in inflation. That means that the price of goods will grow slowly along with take home pay and property values. - 23226
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posted by X - Men @ 5:59 AM
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