BANK ACCOUNT BONFIRE: Biden’s Inflation Burns Americans’ Savings

On an annual basis, inflation picked up, with CPI rising 5.4% in September from a year earlier, in unadjusted terms, a slight uptick from August and the same rate as in June and July, which was the highest since 2008. The so-called core price index, which excludes the often-volatile categories of food and energy, in September climbed 4% from a year earlier, the same rate as in August.

Higher inflation will trigger a 5.9% increase for Social Security benefits that seniors and other Americans receive, the largest increase in nearly 40 years. The Social Security Administration will release its annual cost-of-living adjustment later on Wednesday.

Prices for groceries, gasoline and heating fuels rose along with the cost of new vehicles, rent and furniture. Prices fell for used autos, airline fares and apparel.

“It looks like some of these supply-chain and inventory challenges are going to stick with us for a bit longer—at least through the rest of this year,” said Omair Sharif, founder of Inflation Insights LLC. He said recent price pressures include the firming up of housing rents and other prices that tend to move more slowly.

Americans shouldn’t be subjected to a constant degradation of the value of their savings. You work hard to build your savings through a lifetime of saving until it hurts, and now those savings are being diluted away by inflation that only helps finance the federal government’s nonstop spending spree.

You can’t put a price tag on freedom, or maybe you can. Because, if you know what you’re paying your bank every month to live in the house they own, you know exactly the price.

Recently, I received an email from a married couple. They’re clients. And it just so happens they celebrated their 25^th wedding anniversary the day before and have decided to pay off their mortgage.

Do you remember when you paid off yours? I do. It felt great. And the only reason it happened was because Becky and I were motivated to get it done. Why? Because we never forgot the arrogance of the mortgage lender sitting across from us newlyweds, saying he wouldn’t mind if his bank owned our home—a home that we miss to this day because it was our first.

As an aside, Becky and I celebrate our 23^rd in November, and what makes working in this business with you so enjoyable, especially at 49 years young, is that I have a front-row seat to your life’s milestones.

When my young clients told me they want to pay off their mortgage, it was music to my ears, even if they might be able to “save” money if inflation’s a big issue and the stock market goes up. But those are some big ifs, and as you know, I’m Your Survival Guy, not your “hope that works out the way you want it to,” guy.

What I hope happens is you get out of debt. Because regardless of inflation or markets, you’ll feel like a million bucks when you do. And that’s worth every quarter stuck in your penny loafers trying to beat inflation (Thank you JB).

Action Line: You don’t own your home if you have a mortgage. Your bank does. And we all know where it will be when you need it most. Be prepared.