Comments on: Inflation’s Bleak Prospects. . .in 1978

By: How to develop the habit of spending less than you make - Smart Spending

How to develop the habit of spending less than you make - Smart Spending — Wed, 28 Nov 2007 17:01:45 +0000

[...] “Inflation�s bleak prospects … in 1978″ [...]

By: The Daily Dough (Heroes edition) » The Dough Roller

The Daily Dough (Heroes edition) » The Dough Roller — Tue, 11 Sep 2007 10:38:47 +0000

[...] Dough Roller Retro: Inflations Bleak Prospects. . .in 1978. This is one of my favorites, and it underscores that we shouldn’t get too comfortable with [...]

By: Bad Investors have Forgotten the Past » The Dough Roller

Bad Investors have Forgotten the Past » The Dough Roller — Thu, 19 Jul 2007 16:09:55 +0000

[...] few weeks ago I wrote about the effects of inflation, as seen in a newspaper article from 1978. What caught my attention in the article was that inflation at that time was hovering around 10%. [...]

By: DR

DR — Wed, 30 May 2007 02:37:13 +0000

You raise a good point about how and to what extent one should factor predictions of inflation into retirement analysis. I thought the example of the cost of an education was interesting in that a four-year education has gone from $16,000 to $140,000 ($35,000/year) since 1978 (although there are less expensive alternatives to Georgetown). Of course, how many of us will be funding a four-year education in retirement?

By: Canadian Dream

Canadian Dream — Tue, 29 May 2007 16:15:15 +0000

So using your tution example to get $16,000 up to about $35,000 requires an inflation rate of 2.75%.

So that 6% they were predicting was out to lunch and goes to show that people that use a 4% inflation rate in their retirement calculations are just out to lunch.

Thanks for the interesting article.