The Expert Podcast

…How bad is inflation and how is it affecting the economy ? Well here's an article from CNBC. We're 50% 58% of Americans are living paycheck to paycheck. And 30%. Of people earning a quarter million dollars or more. Are living paycheck to paycheck. What does that mean There's there's a lot more to this besides just what's on the surface. None of these people are homeless They're not starving in the streets. They're not going bankrupt but they're living paycheck to paycheck They were paying their bills. And they're getting by. But they're not doing anything more than that. Even though on the surface it may seem like the life of a person. living paycheck to paycheck is exactly the same as it was four or five years ago when they had a little money left over. But there's a big difference in life and in the future economy, when there's no reserves and no excess capital, here's how that's gonna affect the future. First any discretionary spending is going to go away. Things like getting your nails done. Maybe. Adding accessories to your car. maybe purchasing new clothes, going out to eat going to concerts. These things are the first ones to go away So…if you're in a business where you're the last dollar spent. You need to P pay attention to that. If your nails. If you're a non-essential. Life need for a family. You might want to pay attention to where's your money coming from Because if somebody has X amount of dollars to spend every month and they have to cut back where are they going to cut back first Obviously they need to buy food gas for the car. those kinds of things, but what are they going to cut first If you're the last dollar out ? You're going to be the first dollar. That they keep. Right The first dollar that they…Eliminate from their budget. So whatever business you're in whether you're a business owner or you're an employee. You need to look to see if you're the last dollar out for consumers because people are living paycheck to paycheck and every time. inflation goes up a little bit, whether it's gas prices. groceries. other things will start to have an effect like insurance you know if inflation goes up for. Materials homeowner's insurance car insurance rates will go up because they have to pay higher amounts in claims…As those go up that's going to be more dollars taking from family budgets. So if the fuel price. For putting gas in your car used to be 200 a month And now it's two 40 a month. That $40 is going to come from somewhere It might be well I'm not going to get my nail done nails done I'm not going to get my hair done. I won't go to the barbershop I'll cut my own hair. maybe. You know I won't go out to eat…Those are the things that get cut first because you have to put gas in your car or you still have to buy food. But even with food…You may not buy the same things at the grocery store You may cut back So if you're in a business that provides those extra luxury items…Even if you don't own the business you need to pay attention because you may have cutbacks at your job In fact, We're already starting to see layoffs In fact some companies. In. Hi, leveraged in high discretionary businesses are even rescinding job offers for people that they already offered a job to because they don't need the people anymore…Let's look a little deeper at the numbers first…Consumers are struggling to afford day-to-day lifestyle and rely more on credit cards and carry higher balances. This is a problem. Because if you're living paycheck to paycheck, but at least you're not going into debt. If and when the economy does. Improve incomes go up maybe inflation slows down…You have now the extra money that you can put back into discretionary items immediately. If you have debt that's accumulated. You can't go back. To those extra expenses right away you have to pay that debt down first. So let's say for. you have a monthly budget of $700 a month for extra stuff, eating out. Hair nails. buying a couple extra things for your car or whatever. And now all of a sudden inflation goes up and takes away $500 of that. You're a fuel prices Went up, your groceries went up. Insurance went out Maybe your rent went up and now you only have 200 a month…Well, if you spend the 200 a month and. Now you have an expense your transmission blows on your car. you have some type of medical emergency. Well now you have to go into debt. And then. A year from now you're going to have a thousand or $1,500 on your credit card. That's going to be an extra seven. $80 a month for a minimum payment…So…it's kind of. Deepen the spiral of debt. This is a big deal. 58% living paycheck to paycheck. Even high income earners 30%. Of people making high incomes are also. Not having any extra money leftover. How is this affecting you ? Can you relate to this ? Do you see this happening in your life ? And if you are working in the industry, That deals with a lot of discretionary income maybe your wait staff in a restaurant. maybe in the travel industry are you seeing pullbacks already that's affecting your company or your employment. ?