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 uses the analogy of an underused aircraft engine decaying over time to illustrate how inflation insidiously erodes the value of money left idle.
- Inflation creates a cycle of rising prices and wages, consistently diminishing the purchasing power of uninvested money, which averages a 3 percent loss per year.
- To combat this "economic corrosion," individuals should invest their money (e.g., in index funds like the S&P 500) to generate returns that outpace inflation, much like regular use through aircraft partnerships prevents engine decay.
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