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I thought I had enough …. but then …..

At a presentation some years ago, the speaker spoke about, “the almighty IT.” The theme of the talk centered around people’s general goal setting process and the concept most people share – “once I have ____ (It), I’ll be happy.”  We start out with this at a young age – mostly for toys and certain food – but as we grow older the targets are much more involved and often elaborate. They may relate to our health, our wealth, our weight or our mate.  It’s a revealing conversation to have because most everyone desires something more or different than what they have now.  Do a search on, “I’ll be happy when” and you’ll get a lot of hits and a lot of advice. So what is your “it?” We’d love to know.

There’s quite a bit of research around this topic. One can’t find a more central focus common to most religious, political, economic, physical and social philosophies.  The problem is, there’s one “it” that affects each of these areas directly and is more elusive than a greased pig.  The it – is having “enough income.” To illustrate, recall one of your favorite story problems from math class.

Mr. C is traveling on a train going 3 miles per hour on one track.  Mr. F is traveling on a different track at a speed of 6 miles per hour.  At what point does Mr. F overtake Mr. C? It depends on how far back Mr. F is.    The more important point is that Mr. C and Mr. F are very close to you.

Mr. C is your inCome and Mr. F is inFlation. If real inflation is moving at a pace that grows twice as fast as your income grows, how much is enough income? The fact of the matter is that you will never have “enough income” in this environment.  What you do need are strategies that counter the effects of inflation and improve the growth of your income.

How big is the problem? It depends on where you look for the answers. For an objective perspective on the real inflation rate, review the information found on this site: to understand the calculations behind this chart.SGS-CPI ComparisonIf you fully understand the implications of the reporting of inflation, you realize that Mr. F traveling at 6 m.p.h. might be understated.

For income rates, if you’re retired and relying on social security, you found the reason social security increases have not kept up with your standard of living on the Shadowstats site.  If you’re not retired, and you’re relying on your employer’s generosity for your income increases, this chart gives you an idea of why Mr. C’s rate in the story problem is likely overstated.Decline in Real Income since 2007

At Teske Financial Services, we assist our clients in identifying methods for reducing the impact of inflation. The ability to understand where money is being used inefficiently and ineffectively is critical in an inflationary economic environment. Our clients are given a factual, measurable and verifiable means to evaluate and compare different strategies with their own personal data.

The methods are unique in the financial advising industry. Often times we can show a client how to move an asset that’s providing one benefit (interest, yield, dividend, etc.) to a position where multiple benefits are achieved – with the same money. Better use of the money, more wealth and more benefits must be employed in this time of reduced purchasing power.

Consider this chart identifying the length of time it’s taken to double the median income of U.S. employees.

Income Median Changes since 1967Your money must be working smarter and harder.  Click on the “Contact Us” button and let us help you improve your ability to maintain an adequate standard of living in your future. Mr. C has to move faster and create ways to slow the pace of Mr. F. We’ll show you how and help you to achieve “It.”

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