What does recession mean for middle class?

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Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future. Putting our time and effort in activities and investments that will yield a profitable return in the future is what we should be aiming for. Success depends on the actions or steps you take to achieve it.

Still, I have to say that the one thing that confuses me the most is how most “liberal” economists can claim to care about the middle class and the poor — while still supporting what they call “low” rates of inflation. the economics are painfully obvious. Inflation hurts the poor. Inflation hurts the middle class. Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people’s cost of living that people immediately feel the impact of. It’s not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The Markets has underperformed the U.S. economy as fear of inflation hammers the prices of stocks and bonds.

“You’re not going to remember those expensive shoes you bought ten years ago, but you will remember every single morning when you look at your bank account that extra 0 in there. I promise, that’s going to be way more fun to look at everyday”

Savings are destroyed silently.

Cash is destroyed. Everyone should have at least a year’s living expenses saved as an emergency fund, and inflation essentially destroys a little of this every year. If someone has a net worth of a billion dollars, then inflation doesn’t impact them in terms of lifestyle — they’re not going to have to get rid of cable because the prices go up. The lifestyles of the super-rich are unaffected by inflation. It’s the poor and middle class that feel the actual lifestyle effects. Remember june 2016 when Boris claimed brexit will bring in lower gas bill? How is it going? France (in the EU) nationalized their gas supplier and capped the rise in bills at 4%. Uk is heading towards 400% in January. Nationalise Energy Companies. the Government needs to take back ownership of strategic energy assets. It needs to accept that the Free Market has failed the energy sector, that it is in the national interest to renationalise our energy assets. The Government must therefore renationalise all the UK energy assets.

Retirement for most people is much harder.

Why Saving For Retirement Feels Impossible

Inflation makes retirement for most people almost impossible if not completely impossible. Inflation at 4% is historically “normal”, and essentially destroys half of everyone’s retirement. If you get about 8% returns in the stock market, inflation destroys half of that. Inflation makes it twice as hard to invest for retirement. Not just pretty harder or a little more difficult – inflation makes retirement literally twice as difficult.

Consumers are pushed into investing in finance.

If cash automatically loses value, then you have to do something with your money to beat inflation. Keeping your money under your mattress is an infamously bad financial choice, because its value will get wiped out due to inflation. In the US, in order to have a comfortable retirement, you have to risk a lot in the stock market. In an economic downturn, retirement savings disappear quickly. Also, there is long term care, my in-laws have spent at least a million on long term care and the system keeps rushing them off to the hospital. They are living long in extremely poor health. So, there won’t be the inheritance that helped them get over the hump. What does this mean? This means inflation pushes regular people into big finance — people suddenly have to become investors, whether they like it or not. This means the professionals essentially have sheep to fleece. It’s sad, it’s true.

Drifting into the trading world without the help of a professional trader and expecting profits is like turning water into wine, you would need a miracle.

Debt and risk are rewarded.

Inflation makes going into debt less expensive. As you said yourself, governments want to decrease inflation by raising interest rates. Right now, you can get a mortgage for less than what inflation traditionally is — that means you can essentially get a loan that’s cheaper than what you pay. Free money. Not quite. As long as you’re in debt you’re chained down, hooked up to the system, and Big Banks have their foot on your neck. There’s a reason the big banks like inflation and support the existence of the Federal Reserve — they can use them as a power-play to keep you beaten down and in their system. Inflation doesn’t help the economy. It destroys savings, ruins retirements, doesn’t really affect the rich lifestyles, and forces people to be headed by Big Finance like they’re sheep.

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