How Much is Enough

in hive-100421 •  3 months ago  (edited)

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How much capital is enough?

What about inflation?

What do today's numbers look like compared to what they will be in 20, 30, or 40 years?

I built a simple model based on three variables: Savings & Investment Rate, Yield, and Inflation to answer those questions. The answers might surprise you.


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Thanks for explaining tgis in a very sinple way. Is there a way to accommodate change in investment rate, or earnings or inflation to make this tool a bit more realistic as you cannot always save same amount nor earn at a fixrate.
Thanks anyways

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Yeah, you could change values over time and I've done other analyses that way a year or so ago. It's all guesswork though.

As for me. I think no amount of capital is enough because wants are unlimited. My view

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Then you’ll always be unhappy

So what is this BS about “core inflation?” I know they separate out the basket because of seasonal adjustments. But is there a rational reason to do this?

The charitable view of the motivation to segregate baskets of inflation is to try to get to the base number that affects everybody more or less equally.

The uncharitable view of these motivations is that the government has enormous liabilities in social security that are tied to inflation adjustments. So it’s in their interest to understate inflation as much as they can get away with.

For me, I take a very old fashioned view of inflation which is simply the growth in M2 money supply. Because it’s simply the quantity of money that determines the general price level no matter which products that money goes into.

I suppose a better measure would be M2 growth / population growth but that immediately starts to get into murky territory since the USD is an interna tonal currency.

Should have been following you for a while..

My bad.

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