Though I’ve alluded that inflation is bad for us, we haven’t given this insidious scourge the attention it deserves. Inflation is like the decay you find in an aircraft engine that hasn’t flown enough.
High Finances: The Engine Decay of Personal Wealth
Finance expert and pilot Jason Depew talks about inflation, how much it can cost you, and how you can fight back against it.
Key Takeaways:
- The article likens inflation's corrosive effect on money to the decay of an underused aircraft engine, where time, not just hours, significantly degrades value.
- Inflation systematically erodes the purchasing power of stagnant money over time (e.g., an average 3% annually), creating an economic cycle where prices and wages rise without increasing real value.
- To combat financial decay, the author recommends investing money (e.g., in an S&P 500 index fund) to outpace inflation, rather than letting it sit in low-interest savings.
- Similarly, to prevent aircraft engine decay, it's crucial to fly planes regularly, suggesting partnerships as a practical solution to share costs and ensure sufficient flight hours.
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