Most people that work at a job hopes to get a pay raise each year. Some employees want them more than once a year. Wages is one of the largest expenses they have to run their business.
If you own a business then you know if you want to stay in business then you need to show a profit. If wages go up then you need to find a way to cover that expense. Most businesses raise the prices to cover the cost. This starts at the Manufacturing level to the Retail level. Each business needs to pass on the costs of operating so they maintain their profit margins to stay in business.
There is such a push to get the minimum wage up. In some states they are pushing to get it up to as high as $15 per hour. With the Federal Minimum rate at $7.25 per hour. Here in Arizona in 2020 we are sitting at $11.00 an hour.
The Federal Minimum wage rate in 1955 was 75 cents per hour. In 1975 it was $2.10 per hour and in 2015 it was $7.25 per hour. The link to this is in the below show notes. As you can see it has gone up quite a bit over the years so no wonder prices have risen. This shows why we need to factor an Inflation rate in our Financial Freedom plans.
As always, I am not giving you any Financial Advice and you should seek advice from your Professional Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.
U.S Bureau of labor Stats in April 2014 listed some of the below food prices back in the following times. The link is below in the show notes.
Apples – 15.1 cents per pound in 1955. 34 cents a pound in 1975. We currently pay now around $1.19 per pound for the cheaper apples.
Butter – 70.9 cents per pound in 1955. $1.03 per pound in 1975. We currently pay around $2.29 per pound.
Gas – 20 cents per gallon in 1955. We pay about $2.99 per gallon currently.
Man’s haircut – $1.42 in 1955. We pay at Great Clips like $14.99 now for a haircut.
Doctor’s office visit (general practitioner) – $3.41 in 1955. We pay out of pocket $35 currently through Darlene’s Insurance plan.
Motion picture admission (adult) – 73 cents for each adult in 1955. Today we pay around $9.50 per adult depending on the time of day.
As you can see the above items that $10 from 1955 wouldn’t buy you as much today as it would in todays world. This is another reason to factor inflation into our Financial Freedom plans.
Want more proof. Then if you go to USA inflationcalcultor.com (the link is in the below show notes) will show you what $1 purchase would cost with inflation factored in. Here are some examples from their website.
1955 – Purchase of $1.00 back then, now in 2019 with inflation same purchase would cost $25.82 or Cumulative rate of inflation 2,482.4%.
1975 to 1999 – it would cost $4.75 or 375.2% Cumulative rate of inflation.
1989 to 2019 – has a Cumulative rate of 106.2%.
1999 to 2019 – it would cost $1.53 or have a Cumulative rate of 53.5%
That can help show people also that if they plan on living 20,30,40 years or longer being retired that the value of their money could be less in the future. Hopefully they have money Invested to stay ahead of inflation rates.
So, what have inflation rates been running since the year 2000. The balance,com (link is in the below show notes) listed the below inflation rates.
Year – Inflation %
2000 – 3.4%
2001 – 1.6%
2002 – 2.4%
2003 – 1.9%
2004 – 4.3%
2005 – 3.4%
2006 – 2.5%
2007 – 4.1%
2008 – 0.1%
2009 – 2.7%
2010 – 1.5%
2011 – 3.0%
2012 – 1.7%
2013 – 1.5%
2014 – 0.8%
2015 – 0.25%
2016 – 2.1%
2017 – 2.1%
2018 – 1.9%
2019 – 2.3%
2020 – 1.9% is Projected
The last 20 years above can show you that there has been some inflation. It may seem like small percentages but it adds up over time. It would be a guess to know what the future could bring us. It could be a zero or it could be a huge number. Who knows, but with the push to raise Minimum wage up then we could see prices raise along with it.
All of the above information is why we want the boys to factor in Inflation into their Retirement Projections and their Financial Freedom plans. What do you think Inflation will average per year during your retirement years? I wish there was a machine that told us what it would be. Darlene and myself have our own number that we use for our projections.
Here are some positive quotes I like;
“Get your Money to Work for You… As hard as You Work for it.” By Napoleon Hill
“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett
“There is no way to happiness; happiness is the Path.” By Buddha
“Change Your Thoughts – Change Your Life” by Wayne W. Dyer
Let me know your thoughts about this blog and let me know of others you would like me to do in the future. I feel we can all learn from each other. That is why I am in the helping people retire early, enjoy life more and be more successful. Also, please see my Disclaimer page.
Don’t give up on your dreams; don’t let others talk you out of your dreams. Make your dreams happen. Make it happen today.
Visit my Podcast at www.Live4.Club on Anchor.fm, Spotify, Pocket Casts, Breaker Audio, Google Podcasts, Radio Public, I-tunes, Apple Podcast and more. If you would like to be a guest on my Podcast drop me an email at email@example.com or Text me at 480-389-6224
Thanks, and Have a great night. Please Support or Follow me at https://www.patreon.com/millsway for access to all my blogs.
#financial freedom #financial independence #FIRE #Hustle #Live4 #podcast #millsway
Sources and Resources from Podcast (Available in Show Notes)
- Prices in the past from U.S. Bureau of Labor Stats April 2014 – https://www.bls.gov/opub/mlr/2014/article/one-hundred-years-of-price-change-the-consumer-price-index-and-the-american-inflation-experience.htm
- Inflation Caculator – https://www.usinflationcalculator.com/
- Past Inflation Rates by Year – https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093
- Federal Minimum Wage in Past Years https://www.infoplease.com/business-finance/labor-and-employment/annual-federal-minimum-wage-rates-1955-2015