I Did the Math

This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA My son went surfing several times off the Narragansett Beach on the Rhode Island Shore this year.  He went with a couple of his buddies for the day. They would rent surfboards and then go out all day. Recently he told … Read more

The Difference Between Good Debt and Bad Debt

This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA Good Debt For most folks one of their primary goals is to be Debt Free.  With that said, there will be times when it is appropriate to borrow money. Good Debt is borrowing to purchase a home. If managed appropriately, … Read more

“It’s Not About the Money”

This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA Don’t you just love it when a Major League athlete signs a huge contract with a new team and says, “It’s not about the money.” Bull Just to be clear: It’s always about the money!   Don’t get me wrong … Read more

Make Your Checks Payable to the Smith Family Education Fund…

word "Obituary"

This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA Really? It’s difficult enough when someone passes away.  It’s even more difficult when someone passes away with minor children.  It’s unbelievable when someone with minor children passes away and has not appropriately planned for the funding of their education.   It’s … Read more

Lies, Damned Lies, and Statistics

I took a statistics class back in college. Like many of my other subjects I didn’t do that well in it. I did, however, gain a deeper understanding of what average meant and still continue to aspire to get up there someday. The United States Government produces no shortage of statistics. The amount of data … Read more

3 Proven Reasons Why Investors Should Have Their Own Personal Inflation Index

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INFLATION

 

 

1) The Federal Government Figures Appear to be Gamed

 

The Bureau of Labor Statistics (“BLS”) issues the inflation numbers monthly. It’s convenient that the government inserted the word ‘Labor’ into this bureau. Otherwise it would just be “BS”. The number to focus on is the Consumer Price Index (“CPI”).

To do this calculation, they strip out food and energy costs. Their reasoning for this is that these categories are too volatile. Fair enough, they are. But don’t forget, you are still constantly buying food and energy.  After these two are removed, this is the so-called Core Inflation Rate. This is currently running at 1.6% annually as of January 2014.

The primary issue with how this number is calculated is what they call “quality improvements.” For example, if you buy a new computer that has more memory, a faster processor and better resolution in the monitor, this is adjusted in the inflation index.  The bottom line is that the Core Inflation Index is suspect at best.

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