It’s one thing to see the headlines that inflation is at 40-year highs, but it’s something else entirely when you’re the one paying 146% more for a gallon of gas or 140% more for critical food items like corn and wheat.
The price of everything has soared, and that means people need more income. Unfortunately, a 3% dividend yield won’t make enough of a difference.
I believe the situation is actually worse than what you’re hearing.
Quite simply, the government uses a B.S. way of calculating inflation that understates inflation significantly. By my calculations, inflation has been running at an average of 6% per year for the past five years.
That has resulted in a huge decline in the value of our money. It makes it so a $100,000 salary earned in 2018 is worth about $74,000 today. Or $10,000 that was earned and saved in 2018 only buys you $7,400 worth of goods and services today.
We’re talking about a giant loss in wealth and purchasing power, which is a devastating situation for millions and millions of people.
At the same time, our incomes HAVE NOT soared. They’ve barely budged. Over the past five years, the average wage of the U.S. worker has increased just 2% per year.
This is a terrible situation for people still working, but it’s even worse for people that aren’t working. Those folks are counting on their nest eggs to provide them with security and comfort.
Keep in mind, financial advisors across America urge retirees to keep the bulk of their savings in bonds. If bonds are yielding just 2% or 3%, the retiree is losing wealth every year when you take inflation into account. If you earn 3% in bonds and inflation is running at 8%, you’re losing 5% a year!
I believe we are in an “income crisis” that requires solutions right now. I have talked about this recently, but it is so important that I want to bring everything together for you in our next three Market 360 articles.
The bottom line is that people need to earn more money right now. They need their incomes to be running faster than inflation right now. They need a lot of extra cash on hand to pay for living expenses, home expenses, medical expenses, and the like.
I don’t think anyone can count on the government to solve the problem for them. And I don’t think you can count on a boss or a client or a group of customers to give you a giant increase in earnings.
We need to find ways to make a lot more money outside of our regular jobs… right now. We need ways to leverage our savings to make a lot more money right now. We can’t wait on a solution that will pay off 10 years from now.
I think we need to take the bull by the horns and create our own solutions, which is exactly what my team and I did.
Most folks know we are “quants.” We crunch data day and night, looking for an edge in the market.
Thanks to advances in technology, the amount of data our computers can process and analyze in just one minute is more than one million human accountants could process in 1,000 years. All with our proprietary algorithms.
And after challenging myself and my team to push ourselves farther than ever, I believe we have come up with a solution that could be a lifesaver for many, many people.
The solution is actually two-fold. Our hyper-intelligent computer systems help us identify the best specific investments; but before we even get to that point, we need to rethink the whole idea of income investing. Traditional strategies aren’t going to cut it right now.
This is an important first step, and we’ll talk much more about it in our next Market 360 on Tuesday, August 9.
Louis Navellier, Market 360
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