Inflation is Getting Personal

It’s hard to believe some government reports that inflation has stalled or is dropping. It sure doesn’t feel that way.

I did a summary, and it looks like groceries currently cost about $500/month/person. It feels very uncomfortable. House taxes are going up everywhere, from 7% to double digits in some cities.

Price of insurance, housing, interest rates and more.

In 1980, when Mary and I bought my parent's house for $60,000 in London, Ontario, that was the market price—using an inflation calculator that would equal $223,760 in today’s dollars. I looked up real estate in the same neighbourhood, and while one fixer-upper was for sale for $299,999, most were well above $750,000.

The inflation rate calculator uses the government-provided inflation rates over time. Those, however, are not accurate.

Over time, personal inflation is the cost of a deterioration of the buying power of money combined with a change in quality of life. In my house example, it would take $750,000 today to buy the same house we bought in 1980 for $60,000. That’s an average of 6% inflation over 44 years. On average, inflation has been 6% per year. I consider the floor today as the actual personal inflation rate for all of us, which is likely much higher.

No one talks about quality of life until it gets extreme. I was in London on the weekend and the traffic on a Saturday afternoon was ridiculous. The city streets have never been designed for the population explosion.

People who are homeless or in parks are also impacting the levels of stress within the city. No one can understand why, in our wealthy country, Canadians need to live in these horrible conditions.

My inflation rate is about 10% yearly, with the quality-of-life index also adding. Some 30% of Canadians are reported unable to find a family doctor within 2 years, and the wait times in our emergency rooms go from hours to days.

We talked with someone last week who has been waiting months for life-saving cardiac surgery. Her case is considered “not serious enough” so she waits. Her family waits worried every day. The government's excuse, of course, is that costs have risen, wages have risen, and there is a shortage of everything medical. That sounds like inflation to me.

The final part of your inflation rate is your taxes. That is not included in the government's calculations. I wonder why?

I’m assuming that inflation at 10% per year will stay for the remainder of my lifetime. That’s what the rate for me is today, living here in a small town in Canada. What is your rate of inflation today?

To learn more about this or other topics, subscribe to my podcast on iTunes or wherever you get yours.