Since 2008, when our government and Wall Street mismanaged finances so egregiously that the Federal Reserve Bank was forced to print up 850-billion extra dollars to satisfy the need for something called the Troubled Asset Relief Fund (TARP), inflation has been running rampant.

Of course, the Federal Reserve keeps pointing to the Ten Year Treasury Fund (TNX) interest rate, which has been hovering at around 2-3% for the last 10 years, and proclaims that there’s hardly been any inflation at all.  Everything’s fine!  A Big Mac used to cost about $3.65 back in 2008.  Today MacDonald’s signature sandwich will cost you almost $7.00 – that’s about a 100% rise in price – but not inflation?  Sure.

The Dow Jones Industrial Average was about 10,600 in September of 2008.  It is now, in September 2018, bumping up against 26,000.  That’s a 245% rise in value – for the people who own lots and lots of stock.  But, for the rest of us, that sure seems an awful lot like a whole lot of … inflation?

So probably, anybody who doesn’t own an equity portfolio that’s too heavy to lift needs to watch what they spend these days, because with all the talk of more awesome wars in the Middle East, there is most certainly going to be a lot more inflation in the next decade, perhaps more than in the last.

What’s the Best Real Estate Strategy?

Your most valuable asset is your home.  So what’s the best play in the real estate market these days?  Home prices are sky-high, in spite of there ‘only’ being around 2-3% inflation.  Is it time to sell, and then downsize and use the profits to invest in the stock market?

Or should you pull some equity out of your home and fix it up?  Build it out with the most elaborate materials available to increase that ‘wow factor’ to the max, in anticipation of being able to flip it in the next few years for huge profits.

Or maybe it’s best to hunker down and cut family spending to the max, including upkeep on your home.  Just do bare minimum maintenance and use the access savings to invest, where else?  In the stock market.  Your home’s value is going to go up no matter what, why spend any money on it at all?

The answer may be in the past.  Back in 2004, everyone was yanking all the equity they could out of their homes because everything just kept going up and up – and it was never going to stop.  But the bills came due on the Iraq War, and all the giddy tax cuts.  There wasn’t enough equity in the entire country to pay them, so the bundles of real estate mortgage investments crashed loudly and foreclosures ran rampant through the land.

Our government just passed a whole bunch of tax cuts for the rich and is about to embark on more wars.  Maybe this whole thing is going to repeat itself?

What About Your Health?

Soaring health care costs are forcing people to make tough decisions about health issues.  It used to be, if you needed an operation; you just had it.  But now people are starting to ask, maybe I can get by without that surgery on my cancerous prostate because the data shows that this particular type of cancer rarely kills the patient.  So, how lucky do you feel?

The same is true for some dental procedures.  Years ago, most people had dental insurance that would cover the cost of, say, a bridge between two teeth to replace a tooth that needed to be pulled.  These days, many people are eschewing this procedure and either just leaving a gap in their mouth, or going the cheaper route with false teeth.

According to Dr. Katy Wagner, a partner at Taylor Wagner Family Dentistry, “Bridges can restore your smile, give you the ability to properly chew and speak, maintain the shape of your face, and prevent your remaining natural teeth from drifting and sliding out of place.”

When you consider the ancillary damage that could result from ignoring a large gap between your teeth, with the problems a misaligned bite could cause, the money for a dental procedure to fix it properly seems a small price to pay for that kind of oral security. Therefore, get those dental implants and dental crowns before it gets worse. You might also want to consider getting a root canal treatment if you are having problems with it.

A Financial Crystal Ball

Life would be a lot easier if we did, indeed, have a crystal ball to foretell the future, especially in these times of economic disquiet.  A pretty good rule of thumb has always been, if a large purchase, like with real estate, or financial investment makes you so nervous you can’t sleep at night; maybe you haven’t found the right investment yet?