Quote:
Originally Posted by retiredguy123
It sounds like your analysis only addresses your current spending level. But, if you have a substantial portfolio, you need to get a return that matches the inflation rate to maintain the buying power of your portfolio. For example, if you plan to buy a $500K house in 3 years, and you have a $500K portfolio today, your portfolio needs to grow to match the inflated price that the house will cost in 3 years. Otherwise, you won't have enough money to buy the house.
|
Yes, my somewhat short sighted "analysis" was basically just stating what you replied in that your "substantial portfolio" needs to "get a return that matches the inflation rate to maintain the buying power". Isn't that what keeping up with inflation is all about? Many smart, wealthy people welcome a little healthy inflation, as they can still maintain their buying power with less risky assets.