Inflation hedge for early retirees ? (vacations, relative, vacation, years)
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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I'm trying to reasonably 'stock-up' on items before a potential inflation gouge.
(probably have to upgrade the 30 yr old TV and 20 yr old sofa anyway... but we have a lot of 30 yr old stuff... cars and clothes included)
Are there any items that 'seasoned' retirees would recommend? of course medical care and drugs would be nice to predict. Maybe 'pre - paid' medical!! (we do have LTC, since our parents were 'heavy users' of the care system from age 50 on)
Investing is yet another challenge during inflationary times. (should have bought some of the TIPS
It seems much of the inflation we have seen recently has been driven by demand and speculation in commodities; oil, metals, minerals, food commodities of grains, etc. Some of the effect has yet to migrate through the economy so it has worked reasonably well to invest in commodities. Longer term it is hard to tell how to hedge... from our budget the big hits have been health care, food, and fuel so I don't see any easy hedges.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,722 posts, read 58,067,115 times
Reputation: 46190
I think I see some housing surplus's for those trying to sell 'California specials' (upscale tract homes... 3 car garage - 3000sf). I'm glad I don't have any of those !!! demographics, economy, property taxes, and overbuilt glut does not bode well for this segment.
Rentals will be strong.
I'm glad I was able to sell my commercial props this and last year to use the favorable capital gains period to ratchet my basis when I reinvest as prices and future location wash out. I'm a little leary not being in investment props at the moment as I consider that a good inflation hedge, but I feel buying opportunities will be adequate for a couple years. The commercial resale market is holding up pretty well.
During my 'find-a-new-place-to-live' trips this spring I am washing out some ideas, but still want 3 self supporting & cash flowing places across US with apartment in each for me. I will be looking at campgrounds, retreat centers, and RV storage in vacation destinations near major airports. I think the fuel costs are going to change the 'full-timer's routes and habits, as well as vacations. (I'm glad I have a 52 mpg car and a 20 mpg motorhome). There is probably an opportunity in transporting RV's via rail, if I wanted another job... I've been flying for $87 one-way, can' buy much fuel for that...
Just trying to structure my spending / inventory / acquisitions to not get nabbed by potential inflation, but it is pretty hard to buy much when trying to 'downsize'. Targeting future clothing sizes is a challenge too (from tall and skinny to short and fat...)
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I think the fuel costs are going to change the 'full-timer's routes and habits, as well as vacations.
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We have seen it in our family... my brother-in-law has brought his family to visit annually for years towing a trailer behind a diesel PU but said it is over due to high fuel costs. Says it will just be the two of them this year coming on discount air tickets.
Clearly the economy will evolve a market pressure is changing but it is hard to know the best areas to invest... without a doubt the traditional areas of housing, food, clothing, and transportation have new challenges in this global economy.
It seems your focus on residential rentals may well be a good hedge for this period. I guess the challenge there is to have good management if you cannot be hands on.
A business associate of mine has a strategy to use wand car-wash units as a way to invest in commercial land. He finds a tract with potential and builds the car wash with a goal of the business to break even so that he can stay on the land looking for appreciation. Environmental and water use issues have slowed the strategy in the last couple of years but it has generally been very successful.
Regarding the original poster's question about things to stock up on, how about any major home repairs on the horizon, like a roof or septic system or something that will cost big and will have to be done at some point relatively soon? Furnace, a/c compressor, re-wiring if an old house, etc. Not fancy kitchen countertops, but infrastructure. Of course, with a slowdown of house construction, maybe tradesmen will be cheaper in the future.
One poster correctly points out that the real increases are stuff you can't stock up on- utilities, services, food, all the things whose costs are related to energy.
Along the lines of "stocking up" one of the things we did was try to make our house as energy efficient as possible. We were already doing pretty well (we hate giving money to the power companies) but we did a lot of stuff.
1. Upgraded our celing insulation to R40+, installed radiant barrier. We had already done ridge vents when we re-roofed.
2. Looked at the 28 year old washing machine and decided to go with a front loader. BTW, we went with a bit of a "mini" one. I've actually seen this unit "stacked" in a ski condo we rented. Along those lines we decided to NOT replace the dryer, particularly not with one of those ultra fancy ones that they "guilt" people into buying so their laundry room "matches". It's the laundry room for gosh sakes!
3. Changed EVERY light bulb, most already were, to CFLs. Didn't like the amount of light in two locations so we upgraded the ceiling cans to improve the light with CFLs. Made a great difference.
Along the lines of this thread, I recently read a financial column (sorry, can't remember who right now) about how the coming months may be a great time to pick up DEALS on things in the second hand market. Big ticket items, cars, boats etc. But also EXPENSIVE WASHER/DRYER COMBOs as people get evicted. Keep your eyes out on craigslist.
I totally have to agree w/ Golf God on the washer & dryer debate.
I too just tossed my old whirlpool washer and got a EE LG front loader and then to keep my old dryer since its not worth $600+ to no benefit to being EE. So yep, I keep my old dryer. I don't care for the looks. And we have a busy laundry room.
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(we do have LTC, since our parents were 'heavy users' of the care system from age 50 on)
(from tall and skinny to short and fat...)
