Personal Finance (Not Investing) • What inflation rate are you using?

I use 3% and I assume this is on high side because the official inflation rate usually isn't relative to me.

Then you are just as likely to be above than below the official rate based on your basket of goods

Yet every person who points out their consumption doesn’t perfectly match the CPIs somehow always come in below the CPIs. Almost as if by magic.

In many cases for older folks, I think the magic is a paid-off house or a mortgage taken out 20+ years ago. Housing costs are a large portion of that basket of goods.

But that’s not really relevant. Even setting aside hosing costs, whatever your annual spend is it equals 100% of your annual spend (definitionally). So whatever your basket of goods is, that baskets inflation seems just as likely to exceed the official CPI than undershoot it

Statistics: Posted by leeks — Mon Feb 19, 2024 12:19 pm — Replies 41 — Views 2832