Dr. Harold Wong
Historically, the major American financial dreams are to live in a decent house, help kids with college expenses, and afford bucket list dreams (travel is the number-one bucket list dream in retirement). Since January of 2021, with the Biden presidency, overall inflation has increased 16%. However, inflation has had a different impact on all three major goals.
Homes: According to arizonarealestatenotebook.com, in December of 2018 the median Phoenix home sold for $262,500, and five years later, in December of 2023, it was $430,000. Over the last 10 or so years, Phoenix has led the nation in home price appreciation (or at least one of the top three cities). For those with good credit, the 30-year mortgage interest rate has increased from 4.25% in December of 2018 to 6.61% in December of 2023. The annual payment on a 30-year, $250,000 loan in December of 2018 at 4.25% would be $14,292 versus $29,060 with a $400,000 loan at 6.61% in December of 2023. The difference of $29,060 – $14,292 = $14,768, basically double the annual principal and interest. If you did not already buy your home at least five years ago, you face a major challenge in affording one today.
College: Data from a Jan. 4, 2024, Research.com study by Imed Bouchrika, PhD.
In 2020-2021, the average annual tuition and fees for a public, four-year college was $10,560 versus $37,650 for a private, nonprofit, four-year college. If we add room and board, the total annual average cost becomes $50,770 for a private, nonprofit, four-year college. At prestigious Ivy League schools such as Harvard or Yale, it can exceed $75,000 annually.
Travel: When I was in college, about 55 years ago, the famous travel series by Fodor had a book entitled Europe on $10 Per Day. Of course, that meant staying at youth hostels and never going to eat at a restaurant more than once per day. It also meant buying the Eurail pass with second-class seating and walking a lot.
Today, whether it’s Viking River Boat Cruises or overseas guided tours, it’s typically $500 to $1,000 per day per person. A typical 15-day tour might cost a couple $10,000 to $17,000, counting airfare from the U.S to the overseas location and meals not covered in the tour. In August of 2023 we spent 17 nights in Hawaii, and the total cost was over $19,000. We traveled by ourselves using rental cars and without a guided tour.
Find out how a client who spent $50,000 a year while working and dreamed of $75,000 when retired was able to get $120,000 a year of steady retirement income!
Attend My Free Live Seminars: Tuesday, April 16, or Wednesday, April 17, starting at 6 p.m. at Hyatt Place, 3535 W. Chandler Blvd., Chandler, AZ 85226. The seminars are followed by a free catered meal. The topic is “Beat Inflation by Doubling Retirement Income & Reducing Taxes!”
To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at 480-706-0177 or [email protected]. His website is www.drharoldwong.com.