I wonder if it’s even a transfer of wealth or just all an illusion.
It’s easier to downplay inflation so people think they’re doing better.
In 12 years, my salary is up about 50%, most of the change since Covid. Sure, sounds amazing… However, home prices doubled. Consequently auto, home, and flood insurance has at least doubled. Prices on even raw food has gotten crazy, restaurants are also 50-100% increase in prices. Health insurance is about 4x what it used to be for me. Tax bracket is higher.
So aside from the huge luck of low interest loan at a smaller principal, it doesn’t feel like anything amazing has happened.
On the flip side, I feel the plight of those looking at a 30yr loan at 5-6% on $500k. I can’t stomach it today and certainly not 12 years ago either.
By normal inflation rates, feels like I’ve seen maybe a 15% “raise” for over a decade extra of specialized experience —- before considering increased costs. Of course that was from changing jobs twice…
And quite frankly, property ownership is somewhat a poor investment, just better than renting. The S&P 500 has nearly tripled over the same time period. Of course, taking a 15 or 30 year loan for stock market investment would be insane (aside from impossible).
