An Inflationary Thought
As housing prices continue to zoom forward to dizzying heights in Alberta, I began to ask myself how people can possibly afford these prices. I have reconciled myself to a lifetime of renting - trying to purchase a home with an average price of $427,000 is well beyond a single income.
And yet some of my friends have done it. Admittedly, they beat the major increases and bought when prices were more sane, but they did buy. How? At least two of them were able to do so with inherited wealth. And again this gave me pause.
Those of us in the fundraising business have heard for about a decade now that a major transfer of wealth was going to occur. Trillions of dollars were going to become available for savvy fundraisers to try and gobble up. Boston College's Social Welfare Research Institute estimates the figure to be $41 trillion, with at least $24 trillion going to heirs, leaving (after taxes) some $6 trillion for philanthropy.
So I wonder if the rise in housing prices (and the accompanying inflation of all expenses) has something to do with this transfer? Has it already begun, and we are seeing the early consequences? Heirs are far more likely to spend an inheritance than save it themselves (Bast's Law of Inheritance #1). If so, house prices may well continue to rise, as more and more people receive the fruits of their relatives' labour and penchant for saving.
So let the buying frenzy begin! Oh, wait a minute, it already has. OK, so let it continue! But will this inflationary atmosphere continue, and in effect eat into the buying power of this massive transfer of wealth?
Kind of makes you wonder if there is a globalist conspiracy that manipulates world economies, a la Bretton Woods.
I feel a movie script coming on.
And yet some of my friends have done it. Admittedly, they beat the major increases and bought when prices were more sane, but they did buy. How? At least two of them were able to do so with inherited wealth. And again this gave me pause.
Those of us in the fundraising business have heard for about a decade now that a major transfer of wealth was going to occur. Trillions of dollars were going to become available for savvy fundraisers to try and gobble up. Boston College's Social Welfare Research Institute estimates the figure to be $41 trillion, with at least $24 trillion going to heirs, leaving (after taxes) some $6 trillion for philanthropy.
So I wonder if the rise in housing prices (and the accompanying inflation of all expenses) has something to do with this transfer? Has it already begun, and we are seeing the early consequences? Heirs are far more likely to spend an inheritance than save it themselves (Bast's Law of Inheritance #1). If so, house prices may well continue to rise, as more and more people receive the fruits of their relatives' labour and penchant for saving.
So let the buying frenzy begin! Oh, wait a minute, it already has. OK, so let it continue! But will this inflationary atmosphere continue, and in effect eat into the buying power of this massive transfer of wealth?
Kind of makes you wonder if there is a globalist conspiracy that manipulates world economies, a la Bretton Woods.
I feel a movie script coming on.
Comments
...truth is, some cannot. I know of people who live in Edgemont, so you'd think they're fairly well of, right?
Nu-uh.
They can't put food on the table.
SE - thinking back here to Rich Dad, Poor Dad: a house truly is your greatest liability. The question is, do you have enough balance in your portfolio to afford it?