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Current Inflation Has Different Effects on Different Age Groups

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Re: Current Inflation Has Different Effects on Different Age Groups

#71

Post by user5994461 »

IncRnd wrote: post #36
aphextron wrote: post #21

Earlier quoted context omitted.

>Where do you live, and what on earth are you spending your money on? Bay area ~$5,000 net monthly $2500 Rent/PGE $1000 Car/Insurance/Gas/Parking/Phone/Internet $500 Food/Clothing $500 IRA That leaves ~$500 monthly discretionary income, which I usually try to save as much as possible but inevitably gets eaten up by all the stupid little things in life that cost too much nowadays. I can't even imagine supporting a fam…

Living the Bay Area and paying $2,500 for rent, you have $1,000 net discretionary income. Even if you decide not to shrink your expenses or grow your income, you are still in a great position. PS One day you will realize that things you once thought important are actually unimportant. If you keep saving for that day, you will be in fine shape. There is no need for angst, today. If I might make a recommendation - run…

Money is relative, $500 a month is nothing. It will take a year of savings to pay the deposit if he ever has to move out, or to cover the rent if he ever gets unemployed.

Re: Current Inflation Has Different Effects on Different Age Groups

#72

Post by gmiller123456 »

smallnamespace wrote: post #22
j-c-hewitt wrote: post #18

This is a great example of how you can make up anything by aggregating unrelated statistical measures and then mislead people with a new definition on top of another woozy commonly used definition.

We can certainly argue the technical merits of how they created their 'generation-weighted price index', but differential impacts of inflation seems plausible on the face of it. If you are looking for work in a big city, and big city real estate prices are growing much faster than nationwide, that is a real effect.

>big city real estate prices are growing much faster than nationwide

Important point to make is that is not inflation. Inflation is a decrease in the purchasing power of a currency, and it can be inferred by the cost of many products going up across the entire market that currency is used. But one product going up in one segment of the whole economy is not inflation. What you're referring to is more accurately described as a local cost of living.

Re: Current Inflation Has Different Effects on Different Age Groups

#73

Post by IncRnd »

user5994461 wrote: post #71
IncRnd wrote: post #36

Earlier quoted context omitted.

Living the Bay Area and paying $2,500 for rent, you have $1,000 net discretionary income. Even if you decide not to shrink your expenses or grow your income, you are still in a great position. PS One day you will realize that things you once thought important are actually unimportant. If you keep saving for that day, you will be in fine shape. There is no need for angst, today. If I might make a recommendation - run…

Money is relative, $500 a month is nothing. It will take a year of savings to pay the deposit if he ever has to move out, or to cover the rent if he ever gets unemployed.

You're talking about things that have nothing to do with my comment.

But, on your point - you did the math wrong. He has $12,000 discretionary income not $6,000. He likely already paid his last month's rent of $2,500, and he already mentioned savings. So, it makes no sense for you to infer that it will take him a year to move if he loses his job.

Re: Current Inflation Has Different Effects on Different Age Groups

#74

Post by IncRnd »

CompelTechnic wrote: post #49
IncRnd wrote: post #28

Earlier quoted context omitted.

It's also a great example of using statistics to create a conclusion that fits a narrative, based upon statistically insignificant behavior. This article is entitled, "Over the Past 5 Years, Inflation for Millennials was 14% Higher than for Baby Boomers". Yet, we find out in the last paragraph, indeed in the final sentence, that there is virtually no difference between groups over a longer, more significant period of…

I think the way that percentages were expressed in the headline was intentionally deceptive- 14% seems like a lot of inflation in 5 years! That makes for good clickbait. But the percent that is being talked about is the comparative difference between groups, per the line: Over the past five years, millennials have seen their goods become 8.7% more expensive, Generation X 8%, and baby boomers 7.6%. This means that the…

I think the way that percentages were expressed in the headline was intentionally deceptive- 14% seems like a lot of inflation in 5 years! That makes for good clickbait.

Yep. That's my point. The article's premises do not support the conclusion. And, in actuality the end of the article contradicts its own conclusion.

But the percent that is being talked about is the comparative difference between groups, per the line: Over the past five years, millennials have seen their goods become 8.7% more expensive, Generation X 8%, and baby boomers 7.6%. This means that the price increase for millennials was 14% higher than for baby boomers.

There is a subtle error in this analysis. If companies A and B both grow with A growing 300% and B growing 1% per year, it seems that A might be a better company. That is often why companies that don't make money are valued similarly to companies that do make money. Putting the perception aside, A may have only increased by $4 but B could have increased by $4,000,000,000. Therefore it is not correct to say that the increase of A was 29,999% higher than for B.

Re: Current Inflation Has Different Effects on Different Age Groups

#75

Post by seandougall »

CompelTechnic wrote: post #49
IncRnd wrote: post #28

Earlier quoted context omitted.

It's also a great example of using statistics to create a conclusion that fits a narrative, based upon statistically insignificant behavior. This article is entitled, "Over the Past 5 Years, Inflation for Millennials was 14% Higher than for Baby Boomers". Yet, we find out in the last paragraph, indeed in the final sentence, that there is virtually no difference between groups over a longer, more significant period of…

I think the way that percentages were expressed in the headline was intentionally deceptive- 14% seems like a lot of inflation in 5 years! That makes for good clickbait. But the percent that is being talked about is the comparative difference between groups, per the line: Over the past five years, millennials have seen their goods become 8.7% more expensive, Generation X 8%, and baby boomers 7.6%. This means that the…

Comparing percentages always has the potential to invoke that sort of confusion, but FWIW I'm pretty sure the headline is written correctly. If it were subtracting percentage values from one another rather than dividing, it would be "percentage points" rather than "%".

That said, the article itself is just silly, a true puff piece. I think one could make a more substantive (and more interesting) argument around the idea of the "basket of goods" measurement as a basis for measuring inflation in the first place, as goods make up a smaller and smaller percentage of our total expenses.

Re: Current Inflation Has Different Effects on Different Age Groups

#76

Post by 3pt14159 »

refurb wrote: post #51
aphextron wrote: post #21

Earlier quoted context omitted.

>Where do you live, and what on earth are you spending your money on? Bay area ~$5,000 net monthly $2500 Rent/PGE $1000 Car/Insurance/Gas/Parking/Phone/Internet $500 Food/Clothing $500 IRA That leaves ~$500 monthly discretionary income, which I usually try to save as much as possible but inevitably gets eaten up by all the stupid little things in life that cost too much nowadays. I can't even imagine supporting a fam…

Socking away 10% of your take home income for retirement is not "barely making it". Also, do you have a 401k contribution coming out as well? I assume the $500 IRA is a Roth IRA? By that same argument I could make $200K, sock $5000 per month away in savings and say "I only have $500 in discretionary funds each month! I'm barely making it!"

Eh. If he ever wants to own his own home it kinda is, yeah.

Re: Current Inflation Has Different Effects on Different Age Groups

#77

Post by refurb »

3pt14159 wrote: post #76
refurb wrote: post #51

Earlier quoted context omitted.

Socking away 10% of your take home income for retirement is not "barely making it". Also, do you have a 401k contribution coming out as well? I assume the $500 IRA is a Roth IRA? By that same argument I could make $200K, sock $5000 per month away in savings and say "I only have $500 in discretionary funds each month! I'm barely making it!"

Eh. If he ever wants to own his own home it kinda is, yeah.

I don't think owning your own home in the most expensive markets in the US should define whether you're "barely making it" or not.

Re: Current Inflation Has Different Effects on Different Age Groups

#78

Post by mjevans »

3pt14159 wrote: post #10
taurath wrote: post #3

I wonder how much higher it would be if medical costs were taken out. Housing is the biggest problem for my generation, but it gets almost no traction nor solution.

Housing is largely a problem to do with interest rates and mortgages inflating the land. The actual construction materials themselves (at least here in Canada) aren't too bad. I keep wondering why someone doesn't kickstarter a town. It has all the right incentives. Make guidelines that enforce density in the core and do common sense things from day 1, like wire fibre to every domicile.

That's not really the way to build TechTopia (or if thinking of fantastic (and sometimes silly) videogames, New Tesla City).

Mostly because all the places with good water / land areas have already been selected and are occupied by existing cities.

Logically the thing is to kickstarter/etc buying out some /tiny village/ that has good natural resources in the area and doing something more useful with the area. I also wouldn't mind if there were a modern (Gen IV) nuclear plant there with open-published safety monitoring / procedures. (Only shipments of the stuff to/from the site should be security concerns, and I'd appreciate a military escort for them anyway.)

https://en.wikipedia.org/wiki/Generation_IV_reactor#Fast_rea...

The "fast" non-sodium designs look safe enough.

Re: Current Inflation Has Different Effects on Different Age Groups

#80

Post by ghaff »

j-c-hewitt wrote: post #67
smallnamespace wrote: post #22

Earlier quoted context omitted.

We can certainly argue the technical merits of how they created their 'generation-weighted price index', but differential impacts of inflation seems plausible on the face of it. If you are looking for work in a big city, and big city real estate prices are growing much faster than nationwide, that is a real effect.

Well... sort of, but why call it 'inflation'? That certain age groups tended to act in certain ways and were impacted by differences in price trends in different ways -- that's accurate. What's misleading or confusing is to then redefining the already-muddled term of 'inflation' from an absolute index to multiple indices and then trying to say that because Index B went up more than Index A that some group of people w…

That's a good way of putting it.

The various market baskets that make up the various inflation measures contain goods that will matter to some people more than others. And some of the big ticket items will disproportionately affect certain groups.

Want to live in a high-cost urban area and don't already own a home? Of course, rising housing prices will affect you more than someone who already owns in one of those areas or lives somewhere else.

Are pre-college? Education costs more relatively than it used to?

But, yeah, I don't think inflation measures ever claimed to be equably applicable to everyone, especially those measures that excluded some of the major costs precisely because they affect different groups.

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