Inflation is the New Pandemic

Because fuel prices are at record highs, the cost of everything continues to increase. Worries about getting sick from Covid have been replaced by worries about paying the grocery bill. People who don't normally think about cutting back on spending are now feeling pressure to cut back for fear that they may soon lose their jobs. We are rapidly approaching the point where the trucking companies that deliver our online orders and food to our stores will no longer be able to operate. While most of us are feeling the effects of the worsening economy, lower income workers are already in a depression. All of the wage increases as a result of the pandemic have been consumed by inflation. 

For people who are retired and living off of their savings, the impact of inflation and what it has done to their investments is devastating. From experience I know that it will take many years for markets to recover from the economic trauma. The "experts" say that this will pass like it has every other time, but some of us don't have time on our side and can clearly see that this situation is the perfect storm. A post-pandemic restart, an unprepared supply chain, a growing war between democratic capitalist and autocratic socialist countries, and weak reactionary leadership at our federal level.

The DOW Jones Industrial Average is down over 18% as of mid-June 2022. The NASDAQ is down nearly 32%. My investment accounts have lost over $100,000 so far this year.  My property taxes have increased by 18%. My homeowner’s insurance is increasing by 8.5%. My mortgage payment is projected to increase by 27%. Our monthly living expenses have increased by 18%. The extra money to pay these increased expenses will have to come from savings. Basic business math says that negative cash flow can only last for so long until you have to start liquidating assets. If inflation continues to increase, many of us will be one unexpected expense away from a difficult financial situation. The time to sell investments was six months ago. Now we can only wait and hope for better days.