« YouTube Chiropractic Video Marketing Crushes Competitors Forex Trading Tips From Forex News Sites »
Inflation is often portrayed in the media as a bad thing, however, it is a necessary ingredient for our lives to operate in a smooth manor. While none of us likes paying more for products, inflation, in and of its self is not necessarily a bad thing. For example, stock market beginners need to know in real estate inflation allows our home value to increase while the payment remains fixed.
The following example shows how inflation can actually be helpful.
Jack and Sue bought a starter home in 1990 for fifty nine thousand dollars. Their payments, including insurance and taxes were four hundred and fifty dollars per month.
In the summer of 2006, Bob and Marie were thinking of selling their home and had it appraised. The value of the home was appraised at two hundred eighty seven thousand dollars. Bob and Marie had a house payment at this time of four hundred and sixty dollars.
Inflation has been helpful to Jack and Sue. Not only has the value of their home grown, their take home pay has doubled and their home payment has remained almost the same.
Bob and Marie list the property for sale, but it does not immediately sell. The market for real-estate quickly turns sour and they watch the value of their home drop. Eventually it is appraised at one hundred thirty thousand dollars and they decide to wait to sell. Although the payment remains constant, they are no longer seeing the benefits of inflation.
No one wants to see runaway inflation. That means that we will be paying more at the store for our food and other necessities of life. However, we all depend on some inflation in order for our lives to flow smoothly.
What we really desire is to see balanced inflation. The prices of things grow gradually along with our paycheck as well as the value of our property.
If you are new to gold investing get my free gold stocks report.
Related posts:
Post a Comment