Not to be grossly insensitive here, but have any of you millionaires changed your spending or lifestyle in any way due to the constant drums of “inflation coming!” Or rising prices at the supermarket? Or anything?
0 voters
Feel free to elaborate.
Our head of household services has an inflation adjusted budget to keep in line with costs. We realize greater savings by freezing salaries and benefits of kitchen and cleaning staff.
No. I continue to reuse plastic bags.
-IGU-
Hi @Goofyhoofy,
We don’t live extravagantly so inflation is just taken in stride.
The past year and a half has just been “free-flowing cash” to build this house. We were renting a townhouse and storage plus it was 32 miles one way to our job site seven days a week. Fifteen monthly bundles of bills to pay.
But on the bright side, the cost of lumber came down when we were using the most which was interior framing. In fact, I bought a pallet of 2x4x16’s instead of 2x4x10’s that we needed because the pallet (294 pcs) of 16’s was almost $900 less expensive than the pallet of 10’s! It was NUTS!!!
Gene
All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)
My day to day spending is little affected. Numbers are up but not enough to worry about.
We do have an obligation to keep spending to keep the economy going especially when business is slow. It can be a good time for elective spending.
How much of it is “inflation” and how much of it is “life-stage” related is open for debate. Still, the cost increases we’ve been facing have dramatically outpaced take-home income-from-work growth, to the point where we had been pulling money out of our investment accounts just to stay steady. Then, in late 2022, I lost a source of contract income, which made the gap worse.
A lot of the costs were food and energy expenses, and insurance costs skyrocketed as well. We have three teenagers in the house, and two of them are now drivers. One of them caused a car wreck. On top of that, our school district hasn’t passed a levy in awhile, so the classroom fees and activities costs have also risen substantially.
Put it all together, and we made the decision that we needed to accelerate our mortgage payoff, despite having a 3.61% interest rate, just to restore our ability to be cash flow positive.
So we built a plan to get it paid off by the middle of this year (2023). We got extremely lucky with a market bounce in mid-December and used the money to pay it off sooner.
I’m very glad that we had saved and invested in the past to get to the point where we could do that. Still, it’s not fun, and “not hemorrhaging cash each month” only feels like a win in the context of “holy cow, how bad would it be right now if we hadn’t been aggressively saving and investing before?”
So right now, we’re ok. But unless inflation moderates or income-from-work increases, we’re kind of out of tricks, and something will have to give.
Regards,
-Chuck
Home Fool
I can’t think of any specific changes we have made. We’re frugal by nature, so if a price is more than I’m comfortable paying, I’m just as likely to forego purchase as not, whether that is due to inflation or some other factor. We just got back from a Hawaii trip and prices for goods and services were higher than we’re accustomed to seeing, but a large part of that is just that the cost of living is higher there (and in Seattle, where we also spent a few days) than in Northeast Ohio. We avoided most of the high-priced excursions and did a lot of things on our own instead. We also avoided the premium meal choices on the cruise, and my wife and I often split entrees when in port. But that is nothing unusual for us. Better for the credit card balances and the waistlines.
Probably a question better asked of retired millionaires. I assume those of us still working are less bothered by such since we are still in the accumulation phase.
Retired here.
With regard to inflation, we’ve taken no actions to cut back due to rising prices. Mostly because we don’t buy very much overall. Food is not a significant required expense and other expenses don’t seem to change much. We have two Teslas so gas doesn’t matter unless we go on a long vacation trip with our motorhome (which we did last Fall to see the New England colors).
But… we have had substantial portfolio losses since November 2021 and we cut back big time on discretionary items. We’ll dial it up again when our portfolio moves out of the danger zone (we were down 96% at one point). We’re up around 30% since the bottom in early January 2023… maybe we can resume a more normal spending regimen next year. 
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Hopefully you were careful about any tax implications, but it’s never good to take from your retirement savings to keep current cash flow. That money is now gone from your retirement funds.
Better to cut back on current expenses than future ones.
Holy carp, Batman. Glad it wasn’t permanent. Wow, can’t get over that number.
Yeah… IMO, only idiots lose that much. Thankfully, I have another chance… not to be an idiot… but to be able to get back to what we used to do.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Believe me, I get the math involved. Unless 2022 becomes the new normal in terms of inflation and market returns, though, our retirement plans remain on track. It’s other goals — like our kids’ college — that are on less certain footing….
Regards,
-Chuck
Home Fool
Wow! How many pieces were in the comparable 2x2x10 pallet that was $900 more??!!???
Hi @MarkR,
Sorry for the typo (I corrected it in the post.)
The pallets were both 294 pcs of fir 2x4, 10 ft and 16 ft.
So 1,764 more linear feet of 2x4 for $883 less! (2,940 vs 4,704 linear feet)
Gene
All holdings and some statistics on my Fool profile page
https://community.fool.com/u/gdett2/activity (Click Expand)
Great deal! (assuming roughly equal quality wood)
Hi @MarkR,
Here is a photo of the 12 ft and 16 ft pallets. The 12 ft pallet was 3,600 lb. They are all S4S, 2x4 fir from Idaho.
Does that help you?
Gene
All holdings and some statistics on my Fool profile page
https://community.fool.com/u/gdett2/activity (Click Expand)
They look wonderful! A lot better than some of the crap they sell at my local HomedepotLowes places.
Have you tried a lumber yard? Prices will be higher, but I’d be very surprised if the quality isn’t in a different class than the crap they sell at my local HomedepotLowes places.
If I ever need to buy a pallet I’ll look for a lumber yard!
