I'm doing a spread sheet for amount to invest in my 457 plan at work. I figue that each year the money carried over into the next year would be worth 98% of what it was the previous year.....I'm doing my spread sheet in todays dollars. What's your guess?
2006-12-25 15:24:59 · 3 answers · asked by Ford Prefect 7 in Business & Finance ➔ Investing
i'd estimate US inflation to be 3 - 4 percent on average, just as it's been for the last 75 or so rolling 20 year periods (http://www.federalreserve.gov).
look at the global economy though. where will your money be over the next 20 years? where will you be? 20 years is a long time. emerging markets like china and india could have significant impacts on your question.
instead of looking at how little your investments will be worth over the next x years (forget about that idea), look at how your income replacement requirement will change. your investments will earn x over the next 20 years. your income will grow by y. after you retire, the number you need to grow your retirement income by is z. THIS is the number you seek: z (y too, but most importantly, z). again, there's a lot at stake. i use 3 optimistically, 5 pessimistically.
2006-12-25 18:14:34 · answer #1 · answered by myersei 3 · 0⤊ 0⤋
About 6%. Like the peak interest rates in the 90s. Jeez I loved making money so easily back then.
Honestly, I don't think inflation itself will matter (or at least won't be publicized much) after the next 20 years. Businessmen, economists, and financiers are always looking to get an edge without losing an existing one, so inflation's inflation will become the next big thing. Producers will expect consumers (and other producers) to recognize how the market induces price increases naturally as an excuse for why they're increasing prices to stay competitively priced, profitable, and productive. What will be noted is how a year's inflation compares to last year's inflation.
Besides, we're more likely to spend if they see how this double inflationary stat stays at near 0% instead of seeing inflation itself at 3,5,10, or 25%.
2006-12-25 23:37:00 · answer #2 · answered by Mikey C 5 · 0⤊ 0⤋
invest 1/3 in real estate
invest 1/3 in savings account
keep 1/3 in cash at the house
you will see a economy taking a big dive within 6 months
you will see the real estate take a dive a loose 50% off it's value
within 18 months
you will see a Wall Street colapse in 2010
http://www.matrixinstitute.com/cgi-bin/artman/exec/search.pl?template=index%2Fdefault.html&perpage=1&start=3
2006-12-25 23:42:25 · answer #3 · answered by Anonymous · 0⤊ 0⤋