Topic: Inflation is Poses a Great Challenge for Delayed Gratification - page 3. (Read 443 times)

It does. Been in the same boat as you once this year too! Bought my dream car from 2015 and I swallowed my heart after finding out it was almost twice as expensive now than it was back then. Of course, I was still able to buy it, but it took a lot of my savings more than I expected. This urged me to go big on investing and prioritize it over saving money. Because the logic is when you save money you’re just storing it it’s not compounding it’s not increasing in value whatever it’s just there. When you invest it however, your money essentially works for you, so there is a good chance for profit, and most of all investing it on appreciating assets like gold, silver and bitcoin means that the valuation of your money is secured with saving money that doesn’t really happen because all you’re basically doing is storing the representation of your money and not the value itself. So that’s basically the story of how I got around the inflation problem without risking letting go of delayed gratification.

I haven't calculated what the odds are on a positive ROI on an index fund over 5 years using historical trends but it's almost impossible to lose money over, say, ~10 years. I don't even consider it to be a bet, even though there's inherent risk associated with any investment that yields any level of interest. The inherent risk being virtually zero granted the funds mature over some period of time without needing liquidity.

The risk sure beats letting your funds decay with inflation.

Yes, inflation destroys everything, not only dreams. There are many needs that were within our reach, but now they are difficult to obtain because of inflation.

I never save fiat because it will surely lose its value with time, so my advice to you if you want to save is to save gold or bitcoin because it maintains the value and increases its value with time, look at the price of gold a year ago and look at its price now.

Inflation is actually a sign of economic issues such as supply and demand that affecting the prices of the products that could be foods, clothes and etc. But for my experience, this is actually frustrating even though I am aware of it. I also experienced your scenario OP like I did everything just to save some money to afford buying a new personal computer which cost a lot in here.

Then in just few months instead of downgrading like the prices should go down since there's always a new model that much cost a lot still it increases. I've noticed that it might be a bad thing to the consumer and businessman, but if there's people that are reselling then they profit a lot like they bought in a cheap price then suddenly it increases so people would prefer to buy in the reseller since the businessman increases it's prices.

In my country you can't save for anything. Inflation and currency depreciation is making our currency worthless. When we tell people that we keep our money in Bitcoin to reduce this effect, the will always think that we are overrating bitcoin and its benefit. They will always point to bitcoin's volatility or unpredictability. But my country's currency is more volatile and it never goes up whenever it loose value. The truth remains that bitcoin is a reliable hedge against inflation. They might dispute it but that is the whole truth. My money is in bitcoin and I have not experienced any losses because I am a DCA and not a  lump-sum investor. I believe you won't have lost the value of your money if you had kept it in bitcoin.

This is rather funny to me. While reading I got smiling   not because your dream is not superb but because I knew before I will finish reading your story, felt something would take all the money and yes it happened that way. And one other thing that can push down your savings for buying such a big car apart from the rise in inflation could be health issues, yes health issues. However, I have heard that monies used to buy cars or large properties may not be monies cut down from important house hold necessities. What about in the bid to starve yourself off nutritious food, you start lacking important healthy nutrients that will cause you damage to your system.

Anyway meanwhile, you didn't tell us if you have got your big car

Inflation is not tackled by the way you have tried to do it. IMO I believe if you want to be better in inflation or recession, you have to increase your earning power and not to try to live the way you did by starving yourself and at the end you ended up going back to zero. So you can increase the rate or speed of easing the reward of your delayed gratification by diversification. This is the best to cultail the effect of inflation or recession. For example, if a country is going through recession they are advised to invest and this is why they go borrowing or seek for financial help from other countries. A clue is therefore taken from this that diversification is one panacea to inflation.

It's important to note that inflation is a natural part of any economy and is often necessary for growth and stability.

While inflation can make it more difficult to achieve savings goals, it's not necessarily a reason to abandon the practice of delayed gratification. Rather, it may be necessary to adjust goals and expectations based on economic conditions. For example, instead of saving for a specific dollar amount, one could focus on saving a percentage of their income each month, or prioritize investments that are likely to keep pace with inflation.

Ultimately, delayed gratification can still be a valuable and rewarding practice, even in the face of inflation or other economic challenges. By setting goals and working towards them over time, one can build financial stability and achieve long-term success.

You are doing things right by not becoming a mindless consumer and use all your money, and sometimes money you do not even have, to buy something you do not need, you are pursuing a very specific goal and that is great, however now you need to learn to not save in fiat, because as you have noticed this can be a massive waste of time and effort, what you need to do is to put that money in an asset in which you trust and that you know it can outpace the inflation we are going through.

Delaying gratification do rewarding if you do it carefully. It is expected that if someone sacrifices the present for the future there is a chance the reward could be enormous. The problem is how we achieve and control our gratification. By handling money considerately does not mean just keeping the funds in your bank account untouched. The comprehension of inflation should pressure anyone to seek an investment opportunity.

Where it goes wrong is if you consider inflation yet do nothing about it, even if you delay any unnecessary spending.

Delaying gratification and keeping the money means you were saving, and it has always been said that money saved be it in the banks or personally like in a piggyvest is always affected by inflation. You should have reached out to the car dealers when you had like half the sum or more than half the sum for your dream car to know if they have a payment plan where you can pay twice. If you had made that kind of commitment, the new price would not have affected you because it is already a closed deal where you already know the balance you are to pay. This can work in some cases. If not you keep delaying your gratification until inflation gives you a chance.

Invest the money and get your dream car from the profit of your investment, that is how it should be done.

OP, your brand of car is probably obsolete in four years, despite the increase in car prices. Do you still want it, or are you looking for a new one?
Nowadays, it is absolutely impossible to save up for anything of value without investment. Money lying at home "under the pillow" will certainly depreciate. That is why people use loans. Money must always "work", that is, it must be profitable. In my country, there is also a strange pattern, used cars become more expensive than new ones, that is, when buying a new car in the past, it cost less than now, being used. Demand will always create supply.
But I am sure that you have had a good experience and will be able to decide what to do with your deferred fiat in order to increase your capital in the future and fulfill your dream.
In addition, being a fan of the desire to have a car, not chatting with friends, is such an occupation, because it is friends, if they are real, who could help you with buying a car.

Some of the things you started doing to save up money were actually good IMO. For example, recycling is certainly good, and eating home-cooked food is both cheaper and healthier than eating out all the time. Of course, treating oneself occasionally, as well as buying new things occasionally is completely normal, but I'm just saying that not all of these changes should be seen as restrictions that delay gratification because some of them have immediate benefits.
As for inflation, I agree that it must be very frustrating to save up for a long time only to need even more to cover the inflation. That's why I treat Bitcoin as a currency for savings: instead of losing value over time, it does the opposite, even if it comes with some risks and occasional bear markets.

Is this a real example? I don't think that a luxury goods company would significantly increase the price of a product as long as it's not a staple.
Moreover, if abnormal inflation (hyperinflation) occurs globally, the government will usually issue a solution policy immediately to maintain the welfare of the workers even though it depends on the implementation. So basically, your income will also be readjusted or increased.

If making money with bitcoin becomes so easy, then I think our world will no longer be poor, and we won't have to work so hard to save every penny every day. We all just need to invest in bitcoin and get rich, LOL.

Bitcoin is indeed a great investment, but it should not be too divine, should not be completely dependent on it, and moreover, not every investment will yield a return. Whether the investment is profitable or not depends on each person's strategy, not on bitcoin. If OP puts money in bitcoin when bitcoin is at 60k then he will wait longer than save.
Op is also not new to this market; he has considered the best options for him, and for not using bitcoin in this case, he certainly has a reason.

The rate of inflation differs depending on the country where you are living in, and I know how you feel because I also felt it as well.

A few years ago, I was dreaming of buying a new home for myself. I know that I was far away from that, but I already saw the price, and start saving, and investing some of it to fight inflation. Then the pandemic came, and all was affected. From price of construction materials, to daily wages of the laborers etc. etc. The price of the dream home that I saw a few years ago went up by I guess at least 20%-30%.

You can fight inflation by investing that money into different assets that can give you interest higher than the inflation rate base on your country. It's just that, the rate of inflation for the past 2-3 years has been high that all of us who are earning bare minimum wages are greatly affected. I also want to question you. Why didn't you invest the amount of money that you saved instead of just saving it? You know that the inflation rate will be that high right? I'm not saying that you must've invested it into Bitcoin, but at least try to invest it into different assets instead of you saving it knowing that inflation is that high.

Your heart sunk, and I know the feeling. However, you must've been aware of what's happening with the economy like the inflation rate. There's nothing wrong with saving money because I'm saving a bit of my monthly salary as well. It's just that the inflation rate is very high at this moment that saving most of your money is the worst thing that you can do.

1.You should've invested your money rather than just saving them. Investing preserves the value of your capital and protects it from inflation.
I'm not going to give you investment advise here. You should do you own research.
2.Buying an expensive car(when you don't have high enough income to maintain such car) is a bad decision if you ask me. Expensive cars lose their value pretty quickly and the cost of maintenance becomes very high(especially when the car breaks).
3.Why don't buy a cheaper car, which you could afford? Or maybe you should try to grow your income, in order to afford a 23K USD car.

It's a smart idea, but it's important to remember that investing in cryptocurrencies can be risky and volatile. if relying solely on cryptocurrencies for your financial goals may not be the most practical approach. I think saving money and getting an extra job is a more reliable and secure way to reach your financial goals and of course, avoiding "shitcoins" is always a good idea!


An example of an increasing case as you describe but in my opinion it is natural and of course Inflation is certainly a challenge for delayed gratification, because it can erode the value of the money you have saved over time.

However, it is important to recognize that inflation is a normal part of a healthy economy, and can usually be managed through a variety of financial tools and strategies. For example, investing in assets whose value tends to increase over time Buying land, rice fields or buying gold can help you offset inflation and maintain the purchasing power of your savings.

Sad to hear your story with Savings, I hope you make your dream come true and that one day you drive that car.

Inflation is a simple definition of many problems, some of which you may be able to solve with some smart investments, and others you cannot. One of the factors of inflation is the financial mismanagement of your currency, which means that the currency exchange rate is constantly declining, then converting to dollars or Swiss francs will solve the problem, and keeping gold or long-term investment is an ideal solution.

Sometimes inflation is due to the smooth supply, as happened in the year 2020, and then trying to postpone the purchase will lead to a lot of fees being reduced. Taxes and customs exemptions are another reason for inflation.

Try to figure out why the price of the car changed from $15,450 to $23,680 and you might be able to find a way to make things happy on your side.

It’s not only cars, look at real estate. Basically a lot of items are out of reach due to inflation. Cars and real estate is worse due to supply issues.

It’s not only sporty cars like your dream car. You want a minivan to haul your kids around? Well there are very little in stock. Those in stock are like $40K and if you want a used one you will pay the same price as it cost new about 4-5 years ago. These supply issues are causing alot of headaches for families.

The problem with cars is that they have gone up more than the average inflation rate. In your case they could have looked for an interest-bearing account or something similar so that the savings would yield a little, although they will always yield less than inflation.

It is usually recommended that if you are saving for something but for 5 years or more, put the money in an investment, for example a fund indexed to the S&P 500 because in approximately 85% of 5-year periods it has been profitable. The downside is that you have about a 15% chance of losing money. If you don't want to bet with those positive probabilities, what happens to you is what has happened to you, that you face the inevitable loss of purchasing power due to inflation, which has been exacerbated precisely in this period.

Another idea would be to put your money in Bitcoin, which although it is very volatile, with a high probability of cycle to cycle you will increase your purchasing power quite a lot.