In this 1 hour and 42 minute class, James will go over the impact of inflation on financial independence portfolios.
Taught live on Wednesday, April 29, 2020 at 6 PM.
Topics Covered
- COVID-19 Update
- Historical inflation rates and the United States target inflation rate of 2% per year
- This could be a full day seminar.
- The Past Does Not Equal The Future
- The destructive power of inflation
- Example: $1MM in stock market earning 7% and withdrawing an inflation-adjusted $40K per year using a 4% safe withdrawal rate
- Example: adding variability to the previously static 7% annual return in stocks
- Example: adding buying 20% down payment rentals
- We did not cover the impact of inflation specifically on the Nomad™ real estate investing strategy; this is part of what we could cover in a full day seminar version of this class.
- Inflation: savers versus debtors
- Example: adding variability to stocks market rates of return, appreciation rates, rent appreciation rates and inflation rates
- Phases of Financial Independence™
Things I could add if I decide to teach a full day class on this:
- Various down payment percentages besides 20% down payments I used in the examples
- Buying fewer or more rental properties
- Impact of adding in an owner-occupant property
- Correlating interest rates with inflation rate and seeing the impact of variability in that as well
- Cash out refinances
- Selling properties
- Paying off mortgages
- Hyper inflation
- Deflation
- Variable inflation rates including completely random (for Monte Carlo) and periods of varying inflation
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