Measuring Inflation

Written by William Cate


Measuring Inflation By William Cate

Knowingrepparttar inflation rate for your business or family is vital to your long term financial planning. Thanks torepparttar 142845 Federal Reserve in Minneapolis, it's now possible for you to easily develop an individual inflation meter. Also, it allows you to prove to yourself thatrepparttar 142846 Government is lying aboutrepparttar 142847 inflation rate.

The U.S. Department of Labor reportsrepparttar 142848 Consumer Price Index (CPI). The Government wants you to believe thatrepparttar 142849 CPI isrepparttar 142850 U.S. inflation rate. It isn't. Like many Government and industry statistical indexes, it is intentionally misleading. The purpose ofrepparttar 142851 CPI is to under reportrepparttar 142852 U.S. inflation rate. The CPI rate is used to adjust Social Security payments andrepparttar 142853 real inflation rate would be very costly torepparttar 142854 Government. Consumers relying onrepparttar 142855 CPI mistakenly have a more favorable view ofrepparttar 142856 country's economic future and buy more goods and services, thus creating more jobs and helping ensurerepparttar 142857 economic illusion will continue longer.

The Government's primary statistical method for under reportingrepparttar 142858 U.S. inflation rate is to carefully selectrepparttar 142859 components that make uprepparttar 142860 CPI. The Government chooses items that aren't responding to inflation. An example would be that single family residents were used asrepparttar 142861 housing component until house prices started to move upward rapidly over a decade ago. Then,repparttar 142862 Government switched torepparttar 142863 cost of a single-family rental unit, which wasn't moving up quickly. The steady rental rates are in part due to local government rent ceiling ordinances.

Until last year, gasoline prices atrepparttar 142864 pump were well belowrepparttar 142865 annual CPI rate and were used asrepparttar 142866 energy component. The reason thatrepparttar 142867 gasoline price was low was that our friends in Saudi Arabia were willing to sell oil to us without adjustingrepparttar 142868 price torepparttar 142869 real inflation ofrepparttar 142870 U.S. Dollar.

It's easy to find items whose price hasn't adjusted byrepparttar 142871 inflation rate. Phone costs have declined inrepparttar 142872 past decade, due to competition and PC prices remain constant, etc. The Government's secondary method is to have a statistical formula with a strong downward bias asrepparttar 142873 result.

The Rule of Thumb inrepparttar 142874 American business and financial community is to takerepparttar 142875 CPI and double it to get an approximate real inflation rate. Fiscal conservatives argue it should be tripled.

Someone atrepparttar 142876 Federal Reserve in Minneapolis developed a calculator based uponrepparttar 142877 CPI. [http://woodrow.mpls.frb.fed.us/research/data/us/calc/] It allows you to determinerepparttar 142878 factor needed to adjust prices for any year, starting in 1913. If you want to determinerepparttar 142879 CPI adjusted price for an item in 1913 withrepparttar 142880 same item in 2005, you'll find that you should factorrepparttar 142881 1913 price by 19.8. As a byproduct of where I dined during my college years, I know that a steak dinner in a middle class St. Louis, Missouri restaurant was $0.25 in 1913. The restaurant had its original menu onrepparttar 142882 wall. Based uponrepparttar 142883 CPI that steak dinner should cost $4.93 today. I'll bet you can't get a decent steak dinner in St. Louis for less than $10.00 now. I know that I can't get one for less than $20.00 inrepparttar 142884 San Francisco Bay Area.

Commercial Income Property Financing: Part 1 of 3

Written by Cameron Brown


Welcome to this first portion of a three-part series about income property. In this first segment we will be discussing financing options for commercial income properties as well asrepparttar upside (and downside) of owning this type of property.

If you're interested in getting intorepparttar 142844 income property business, chances are you'll need financial assistance from your local bank or private lending institution. You'll soon discover that making sense ofrepparttar 142845 many different options available can be confusing if not down right frustrating. If you're new torepparttar 142846 income property market you may be unfamiliar with some ofrepparttar 142847 terminology you'll hear. The purpose of this article is to assistrepparttar 142848 novice in getting a good start in this potentially lucrative industry.

There are many different options available to you depending onrepparttar 142849 type of income property you're interested in investing in. Most lenders will recognize three separate and distinct types of property, each with it's own financing requirements. These properties include commercial, residential, and industrial income property.

Commercial Income Property

If you plan to invest in a commercial income property, you're probably planning to rentrepparttar 142850 building to retail businesses for use as office or warehouse space. As a commercial income property owner you can benefit from a perk not usually available to residential or industrial income property owners; you haverepparttar 142851 option to charge a percentage of your tenants monthly income in addition to a set monthly rent.

This percentage is usually based onrepparttar 142852 gross monthly sales revenue of your tenant. For example,repparttar 142853 rental contract may include a $5000 per month base rent amount plus 5% ofrepparttar 142854 tenant's gross sales forrepparttar 142855 month. If you're tenant brought in $20,000 of revenue last month, you get an additional $1000 on top ofrepparttar 142856 $5000 base. You may be unfamiliar with this type of arrangement, but it is actually quite common.



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