There are lies, damn lies and statistics. Government data often capture the imagination of the crowd. I can’t remember how many times I have heard that most people cannot afford to cope with a rising cost of living despite low official inflation data.
It feeds our suspicions all along that all is not right with the economy. Of course, some of our elected leaders remain blissfully ignorant. Enough of the soap opera!
Indeed, during my recent trip, I met people who complained about the rising cost of living eating into their income. The price for whatever we all have to buy is rising, as with our home, health care, and a decent college education for our children.
The harsh reality is that the standard of living of most people is being squeezed at an alarming rate by both price increases and real wage stagnation or even cuts. Some people are panicking, talking about their mental health falling apart and running out of savings. Relying on our elected leaders, who are often clueless about the economy, to save the day is a recipe for disaster.
For those who diligently save money, inflation can be particularly painful. The value of saved money diminishes over time if the interest earned on savings accounts does not keep pace with inflation. This results in a loss of real wealth, discouraging savings and leading to financial insecurity.
Wealthier people, connected celebrities and those with assets or investments that appreciate in value, often fare better during inflationary periods. In contrast, the lower income group which spends a larger proportion of their income on necessities, feel the pinch more acutely.
I bring this up not to complain but to make sure you are doing something about it even if you are not one of those wealthy folks. Like it or not, inflation will be a bigger monster in the coming years. Before I hit the send button, here is the chart of the world’s most expensive places to live.
