Month: April 2017

Proverb of the Day #92

Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.   Ecclesiastes 11:2

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New International Version (NIV)
Holy Bible, New International Version®, NIV® Copyright ©1973, 1978, 1984, 2011 by Biblica, Inc.® Used by permission. All rights reserved worldwide
ved.

Update on My Trash-Picked Weber Grill

I am happy to report that the Weber Grill I trash picked two weeks ago is ready for service!

Details: It’s Weber Genesis Gold Model B manufactured in 2004 (model 6240001). It retailed for $550 – the equivalent of $720 today. (BTW it’s rare for Weber grills to be discounted from list price, maybe for end of season closeouts or model discontinuations.)

Here’s why I believe the previous owner put it out at the curb:

A hinge on one side was broken. The hinge was part of the side endcap casting.

I contacted Weber. The end cap is not available by itself; I would have to buy the entire top lid assembly for around $250 with tax and shipping – but at least they stock parts for a grill made 13 years ago!

I have to admit that I seriously considered ordering a new top. Instead, I came up with this makeshift solution:

I fabricated a new hinge out of an aluminum angle bar and bolted it to the lid (it’s painted black). There was little to lose by trying. The grill also needed new caster wheels.

This past weekend I cleaned and polished it.

The burners and checked out fine. With the lid closed, it gets up to 600° F in a hurry!  I also got this cover on Amazon; it’s half the price of an ‘official ‘Weber grill cover.

So, with a little bit of effort, someone else’s trash has been transformed into.. …well, maybe not a gem, but at least a semi-precious stone.

Keep a lookout, folks; you never know what you treasure you might find hidden out in the open! And I do promise you a trash picking post real soon.

Also, here is a great article about a couple who rehabbed a Weber grill they purchased from a thrift store for $50. They put a whole lot more effort into theirs than I did into mine but, their’s looks like it just came from the showroom floor!

Cheers, Paul

© 2017 Paul J Reimold

 

Proverb of the Day #91

Cast your bread upon the waters, for you will find it after many days.   Ecclesiastes 11:1

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Scripture quotations are from the ESV® Bible (The Holy Bible, English Standard Version®), copyright © 2001 by Crossway, a publishing ministry of Good News Publishers. Used by permission. All rights reserved.

Proverb of the Day #90

So I commend the enjoyment of life, because there is nothing better for a person under the sun than to eat and drink and be glad. Then joy will accompany them in their toil all the days of the life God has given them under the sun.   Ecclesiastes 8:15

Photo credit: KOREphotos via Foter.com / CC BY-NC-SA
New International Version (NIV)
Holy Bible, New International Version®, NIV® Copyright ©1973, 1978, 1984, 2011 by Biblica, Inc.® Used by permission. All rights reserved worldwide

A Million Bucks Ain’t What It Used to Be

Sadly, times have changed; a million dollars isn’t what it was.
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Once upon a time, one million dollars represented the hallmark of rarified wealth. But due to inflation, the value of a million dollars has been greatly diminished.  Today, one million dollars might provide a comfortable, middle class retirement, assuming it’s supplemented by Social Security and one does not retire in a high-cost region of the country. Indeed, a million-dollar fortune 100 years ago would amount to $21 million dollars today!

Facts about Inflation
  • Inflation is a reality that must be factored into your long-term financial planning
  • Excessive inflation can be devastating but moderate inflation is a sign of a healthy economy. And inflation is definitely better than its alternative: deflation. Why? Think Great Depression.
  • Over the past 60 years, inflation has averaged 3.80% annually. At that rate, prices double (and the value of a dollar is cut in half) every 19 years. (Here is a link to an Inflation Calculator. Also, recall the Rule of 72 for estimating when money doubles.)
  • The effects of inflation are quite uneven. For example: healthcare and college education have far outpaced the general rate of inflation. (see chart below)
  • On the other hand, prices for many items, particularly electronics, have sharply declined. In 1965, RCA announced the first color television set for under $400 ($399.95); that would be the equivalent of 3,100 dollars today. The IBM PC introduced in 1981 sold for $1565; this would be roughly $4400 now. Today a vastly more powerful desktop computer – or a flat screen high definition TV — can be had for under $500.

Here is a chart that tracks inflation on various goods over a twenty year period. The average or composite rate of inflation 1996-2016 is 55%
Take Aways and Recommendations
  • Be warned: just as investments can grow exponentially, thanks to the power of compounding, the impact of inflation also grows. Over time, the buying power of a dollar will erode. (For the power of compounding, refer back to Pennies a Day)
  • Inflation is a major threat to retirement – particularly for those depending upon fixed-dollar payouts such as pensions and annuities. One advantage of Social Security is that its payments are indexed for inflation. However Social Security income by itself is not sufficient for most folks in retirement.
  • Plan for inflation in retirement by keeping a portion of your retirement funds in investments that potentially outpace inflation, such as stocks.
  • The Frugal and Wise are not early adopters of new technologies. They are cheap adopters of technology. There is a huge premium to be paid for being the first with the latest gee-whiz gizmo. Wait a couple of years and watch prices plummet. (Being a cheap adoptor of technology will be the topic of a future FW&W posting.)
  • Don’t despair that a million bucks ain’t what it used to be. Or that you are nowhere near accumulating such a sum of money. No matter what your income or stage of life, beginning today, diligently save, invest and patiently watch your nest egg grow over time.
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I hope provides some perspective on inflation.

Cheers, Paul

© 2017 Paul J Reimold