Why Inflation Hurts the Aged Maximum

There is a convincing reason for the aged to work even after retirement from work in certain countries especially if their retirement benefits are not large enough and inflation is more than the optimum level. Inflation at best captures average price of a predetermined basket of goods. Individuals, however, have different preferences for goods. Even if inflation is kept at the optimum level, it might affect certain people unfavorably if their preferences for goods are on the wrong side. For example, if a retiree just makes both the ends, an increase on house rent of $20 per month, will force the retiree to cut his consumption of preferred goods or to find alternative residence. In both the cases, the retiree forgoes satisfaction by reducing usual consumption considering the logistic cost involved in shifting the residence. On the aggregate level, it is negative for the economy. As inequality in many advanced and developing countries widens more and more in recent times, a favorable social benefit policy is imperative. This also calls for attention to early financial planning before retirement, failing which a person’s retirement life will be in jeopardy. Financial education is in the interest of the State rather than its citizens.

The best social benefit that a central bank and a government can provide to people is controlling inflation and keeping it at an optimum level. The following data best depicts the financial pressure due to inflation that is higher than optimum level.

Suppose, your monthly expenditure is $5000 at present cost. If you are retiring after 24 years, then what will be your monthly income requirement? It depends upon where you are living, and who your central bank is.

If your central bank is keeping the inflation at 2%, then your monthly requirement will be $8040, after 24 years.
AT 3% inflation, it will be $10145, after 24 years.
At 4% inflation, it will be $12795, after 24 years.
AT 5% inflation, it will be $16120, after 24 years.
AT 6% inflation, it will be $20240, after 24 years.
@7% your monthly requirement will be $25385.
@8% your monthly requirement will be $31665.
@9% your monthly requirement will be $39500.
@10% your monthly requirement will be $49270.

If you have any specific goal such as buying a home at your retirement, then you will have to look for inflation index of home. If you can buy a home for $100,000 today it will cost you $1 million after 24 years at 10% inflation. It is impossible for a person who just makes both the ends. Everyone needs surplus income and the surplus income has to be invested intelligently.

What You Really Need to Know About Online Rental Payments

Letting tenants pay rent online is the most efficient way to receive payments with ease, establish a good landlord-tenant relationship and minimize stress for both parties.

For those who are not aware of the benefits of paying rent online, this post will provide more information concerning this. Here, I will explain everything people need to know regarding online rental payments in terms of reliability and transparency.

In reality, tenants prefer to pay rent on the Internet.

It is not surprising that younger tenants are familiar with paying bills online. Based on recent studies, 74% of tenants are less than 45 years old. Younger tenants are aware of the benefits of paying different types of bills electronically.

Since online bill payments are automated stress free payments, give increased security and allow reduced paper use, younger tenants will probably be also interested in online rental payments.

In case tenants have been paying their other bills online, they can pay their rent online as well. If not, they need to pay rent by means of paper checks, which is a slow, obsolete and tiresome process.

It will be easier for tenants to pay rent online. When living in a rented unit is hassle-free, it creates a positive impact on the way tenants view their landlords as effective. This is just as important when the time comes to re-signing their lease.

Without a doubt, landlords will also favor online payments, especially when it comes to the quickness of receiving payments. Transferring money online is a lot more streamlined than mailing checks and makes sure that landlords get their money faster and more securely.

Tenants are more efficient when paying online.

Based on another study, 85% of tenants who pay rent online pay their rent online on the following month.

This is true, especially when tenants set up automated payments. Even if they are not automated, it is still more likely for online payments to happen on a regular basis because of the ease of completing them. Since it is important for landlords to receive their payments consistently and on a well-timed manner, this is more likely to happen only with online payments.

Tenants (as well as landlords ) acknowledge the transparency given by online payments.

If tenants pay rent online, both parties will see the flow of payments. For example, landlords will know in case their tenant has paid and on what day. This transparency reduces the burden of communicating with tenants every now and then on how and when to pay rent. It also minimizes confusion, streamlines interactions and removes the tendency for tenants to forget about rent payment.

Paying rent online also removes the chance of committing human error. Tenants will not forget to pay, pay the wrong amount or make excuses such as not knowing the name to be written on the check or the address to mail it to.

It is more secure to pay online.

In spite of fearing hackers, online bill payment and online banking are safer than paying a check.

When a tenant is cautious about paying rent online, landlords can ensure them of its safety. As a suggestion, they could use very strong passwords and change their password more often. Online rent payments remove the possibility of letting bank information get in the wrong hands. This is a potential risk when a mailed check is not delivered to the right place.

Protecting Our Economic Health Despite Corona

As I sit in our home in self-isolation, I ponder our country’s economic health over the next several months and beyond. Watching people mobilize to fight an invisible coronavirus is certainly inspirational. We all know that managing individual behavior will go a long way towards slowing down and eventually stopping the spread of this frightening pandemic.

Yet, why is it that canceling large events, not meeting in large groups, working from home and keeping six feet of separation between people enough? I fear that by shuttering businesses including restaurants, bars, malls, gyms. movie theaters, travel companies and more that we are headed to unprecedented economic difficulty.

At this moment, a couple of thousand people have died in the US, which is sad and painful especially for their families and loved ones. However, if we stay on this course of stopping business commerce, then hundreds of thousands of people will die from the dire economic consequences that may lie ahead.

When the unemployment rate rises one percent, nearly 40,000 deaths may follow according to Bluestone et all in The Causes and Consequences of Economic Dislocation, which is often summarized in economic textbooks and quoted in the popular movie, The Big Short. A further breakdown of the numbers include: 20,000 heart attacks, 920 suicides, and 650 homicides.

A three percent rise in unemployment could lead to well over 100,000 deaths, which significantly eclipses the several hundred coronavirus deaths that are directly connected to the pandemic. I believe this scenario shows we need to maintain social distancing practices, yet keep our retail businesses open. If certain individuals, such as seniors and those with pre-existing health conditions wish to self-isolate, then they can take the necessary steps.

The remaining 80% to 90% of the population need to learn accept and live with the risk of this pandemic to maintain our quality of life. We can alter our individual behavior, practice good hygiene, show compassion for those who become ill, mobilize financial and human resources to fight the pandemic and do so without grinding our business, personal, and consumer lives to a halt.

Compassion should also be extended to the small business owner, who has the working capital to operate for only a short period of time without modest sales. Their entire allocation of finances may be invested in the business including the ability to support their employees and family. In addition, they could be at an age where there is insufficient time to recover from a business or personal bankruptcy. Shouldn’t we accept a reasonable amount of risk to give this entrepreneur the opportunity to keep their business afloat?

Another over-looked aspect of this pandemic is the geographic unequal distribution of the virus. Four states, including New York, New Jersey, Washington, and California consist of 64% of the cases. Breaking it down further, most of the people with the illness in these states live in New York City, Seattle, and the CA Bay Area.

Although the virus has reached all 50 states, why should West Virginia with eight cases and South Dakota with 50 cases and one death suffer negative economic consequences when their case numbers are extremely small. West Virginia is already in a tough spot due to the loss of manufacturing and the coal industry in their state.

In today’s world, there is risk all around us with crime, car accidents, natural disasters and more. We do not stop living due to tragic circumstances that inevitably find their way into our lives. Instead, we confront the tragedy head on and know in our guts that we must always find a way to persevere. The ultimate risk is not taking one and right now we are on extremely risky ground.