The Silent Killer
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.”
“Mom, mom… can I get some ice cream? It’s only 25 cents. Please! Pretty please!!” My mother looked over at me and said, “Sure son, but only after I’m done picking up some other items.”
This was a typical conversation my mom and I had whenever we visited the local Thrifty Drug Store back in the late ‘80s. I can still taste the Mint 'n Chip, Cookies 'n Cream, Black Cherry and my favorite Pecan Praline.
Vintage picture of Thrifty Drug Stores from the ‘70s.
Much has changed since then. The Thrifty stores went out of business and were acquired by Rite Aid who still kept the beloved Thrifty Ice Cream. I recently visited my local Rite Aid to see how much it cost for a scoop of the same ice cream that I had as a child.
What was known to be a very low priced ice cream, now costs $2.79 a scoop. Now you might be thinking, that’s not that bad. My local ice cream store charges $6 a scoop. While that might be the case, my point of sharing this story was to show how the price of the exact same item has gone from $0.25 to $2.79 in 35 years (1989 - 2024).
That is over 10 times what it cost back when I was a kid. As ridiculous as that sounds. It’s safe to say that by the year 2060, when I’m in my 80s, that same ice cream could possibly cost over $25 a scoop!!
Visiting the local Rite Aid in Pasadena, CA for some Thrifty Ice Cream.
Inflation is known as the silent killer. You don’t realize it in the short-term (even though these last couple of years have definitely been a different story) but it earns its reputation through the slow deterioration of your purchasing power. Meaning, the same dollar bill can buy you less goods and services as time goes on.
Recent data has shown that the inflation rate, year over year, has started to slow down. It might not feel that way for many families who have felt the effects of inflation since the start of the pandemic. Prices have continued to rise as wages have had a harder time keeping up.
The cost of housing, food, transportation, energy, healthcare, college tuition and many other items have continued to rise over the last several years. When steady and predictable, a moderate amount of inflation can be a sign of a healthy, growing economy. But when it increases suddenly and rapidly, inflation can cause problems.
Action Items
Inflation is inevitable, so what’s the best way to prepare for these future price increases and mitigate its impact?
Here are some practical ways to combat inflation:
Diversify Investments: Allocate your portfolio across different asset classes, such as stocks, bonds, real estate, and commodities. Diversification helps mitigate the impact of inflation on your overall wealth.
Invest in Equities: Historically, stocks have outpaced inflation over the long term. Consider investing in a diversified basket of companies with growth potential.
Real Estate: Owning property can act as a hedge against inflation. Real estate values tend to rise with inflation, providing a tangible asset.
Commodities: Consider a diversified commodities portfolio that invests in gold, silver, or oil. These assets often appreciate during inflationary periods.
Review Your Debt: High-interest debt can erode your purchasing power. Prioritize paying down debt to reduce its impact.
Consider High-Yield Bonds: These bonds are debt securities, that are issued by corporations. They can provide a higher yield than investment-grade bonds.
Remember, making small adjustments, like the ones above, can make a big difference in preserving your purchasing power!
Have any questions, concerns or just want to share your favorite Thrifty Ice Cream flavor? Just send me a message! 🍦🙂
~Alex
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