INFLATION
RATE MEASUREMENTS
|
Years
|
3.5%
|
4
%
|
5
%
|
6
%
|
7
%
|
8
%
|
|
3
|
1.11
|
1.13
|
1.16
|
1.19
|
1.23
|
1.26
|
|
5
|
1.19
|
1.22
|
1.28
|
1.34
|
1.40
|
1.47
|
|
7
|
1.27
|
1.32
|
1.41
|
1.50
|
1.61
|
1.71
|
|
10
|
1.41
|
1.48
|
1.63
|
1.79
|
1.97
|
2.16
|
|
15
|
1.68
|
1.80
|
2.08
|
2.40
|
2.76
|
3.17
|
|
20
|
1.99
|
2.19
|
2.65
|
3.21
|
3.87
|
4.66
|
|
25
|
2.36
|
2.67
|
3.39
|
4.29
|
5.43
|
6.85
|
|
30
|
2.81
|
3.24
|
4.32
|
5.74
|
7.61
|
10.06
|
|
35
|
3.33
|
3.95
|
5.52
|
7.69
|
10.68
|
14.79
|
|
40
|
3.96
|
4.80
|
7.04
|
10.29
|
14.97
|
21.72
|
You can use this chart to help you
estimate what "THINGS"
will cost in the future. For example, if a new water heater costs $300.00
today and you expect inflation to be about 6% annually, then in five years the
chart shows you that the water heater will cost 1.34 times what it costs today
or $300.00 times 1.34 or $402.00.
Want
a real shock? Calculate the future cost of a new car! Say, that the car costs $15,000 today and car prices are
expected to increase 6% every year. In five years that $15,000 car will cost
you $20,100!! Assume you will be "retired" for say 20 years. Imagine
the affect of inflation on FIXED INCOMES!
THIS
CHART REVEALS WHAT THE AFFECT
OF INFLATION
CAN BE ON OUR
OWN FINANCIAL LIFE!
I
have modified the chart to HIGHLIGHT what
I call the DOUBLING FACTOR. This
factor shows you, at the various inflation rates, how long it will take prices
to double. At 7% inflation, it's about every 10 years. At 6% inflation, it's
between 10 and 15, actually it's 12 years.
If
you think you need $??
amount today, for some financial goal, use this chart to
estimate what $?? will
cost in the future!
For
a full blown Retirement Seminar Outline, go to
Or
download the PowerPoint Slide show

Where
I explain this chart and a lot of others that relate to Earnings, Inflation
and Compounded Interest