Philotimo Wealth Management

Click the link above to read the full article.

The author of this article is Mr. Money Mustache. Who is a great follow and has recently started posting with regular occurrence again, which is great as one of his followers. He is a no nonsense writer that often brings charts and data into his blogs (which of course we love here!).

If you are on social media or watch BNN / CNBC you have heard inflation talk too many times. If you have a friend or family member that does those things, they have probably mentioned it to you! The article does a fabulous job of walking us through what is inflation, what causes it, why some inflation is good and what happens now.

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I highly recommend reading the full article as a few of our favorite quotes below do not do it justice.

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What is inflation? When too much money is chasing too few goods and services, you get inflation.

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Why Inflation does NOT mean we are getting poorer. If the price of bananas doubles, and your salary doubles, nothing has really changed: you can still afford exactly the same number of them.

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So, inflation is good for borrowers, neutral for investors, and it’s only bad for people who are either holding cash, or stuck with an income source that does not keep up with inflation.

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So What Happens Now? The first rule of this situation is the same as all other situations: don’t panic, and enjoy this whole journey as a learning experience. Prices will fluctuate, and the world’s economy will adjust accordingly in the coming years. You and I will continue to prosper. The big picture magic is already starting to happen: supply chains are beginning to untangle themselves, and companies are making big new investments to increase production. Despite the rumors of “all the jobs going overseas”, the opposite is actually happening. Intel is building $20 billion worth of factories in Arizona to address the world’s semiconductor supply, and Austin Texas is now home to what will soon be the world’s biggest automotive factory. These are just two of thousands of similar projects around the world right now.

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And so concludes our lesson on the current ‘scare’ of our news cycle. As always, it’s an opportunity for learning rather than worry, and even more importantly: you have more control over it than you might think.

The article linked and mentioned above was published January 11, 2022 and written by Mr. Money Mustache. You can follow his blog at Mr. Money Mustache.

This article was prepared by CJ Stevens and Jerry Kallitsis who are both mutual fund representatives with Investia Financial Services Inc. This is not an official publication of Investia Financial Services Inc. The views expressed in this article are those of the author alone, and are not necessarily those of Investia Financial Services Inc. The content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity.