Random Thought

[DollarBill]

1st thought: Does anyone find it ironic that the Fed Chair-Woman Janet Yellen is 67 years old? You would think that people who are Economist would have cut out early. That has to be a stressful job, if you had the option would you want to do that at age 67?

What drives someone to keep going after they have Millions? I'm sure it's for power but it sounds so narcissistic.   

2nd thought: Why does the Fed target 2% for inflation? Who makes that up and why isn't it 0%? I'm sure it's because it's a secret way for more tax revenue but it really doesn't make sense to me. 

[Jamesqf]

I don't see why it's so hard for some people to understand that some other people actually enjoy the work they do.

[surfhb]

Well she is what many, including myself, would consider the most powerful person in the world.    Maybe thats her motivation?   People like her aren't motivated not to work :)

Even after I FIRE I still plan to work PT till I keel over :)

[Prairie Stash]

Maybe she finds it fun? It's the same reason I'll probably come onto this forum after I retire, after FIRE why would you need to read MMM?

As for 2%, why not? Really though there's little difference between 0 and 2 and 2% gives a buffer if you come in low so as to avoid deflation.

[George_PA]

2% is probably the target set by the Fed because it is generally recognized in economics that you want small amounts of inflation and you want to avoid deflation.  If set the target for 0%, it would be too close to the edge and you easily risk having deflation. 

Inflation, in small amounts, is good for a nation's economy because it is encourages consumption.  People's money is worth more today than it is in the future, because tomorrow's prices will be higher for the same good or service.  For example, if I buy a shed for my house it may cost $800 this year but if I wait until next year if may cost $820 for example.  Thus the population as a whole is  encouraged to use the money immediately to purchase goods which helps employment and help grow the economy.

In a deflation period, prices are falling, thus people tend to hold on to their money and not buy anything because they are waiting for the lower prices.  Thus, it encourages too much hording of money on a national level when it turns hurts consumption and employment.

[Grid]

FWIW, Economics in One Lesson (a really old book that is suggested reading at the end of Early Retirement Extreme) argues that 0% should be the goal.  It's just my opinion, but the right companies/products/services would prosper in an economy where money maintained its value.  I also don't think inflation is the necessary evil people make it out to be.

[shotgunwilly]

FWIW, Economics in One Lesson (a really old book that is suggested reading at the end of Early Retirement Extreme) argues that 0% should be the goal.  It's just my opinion, but the right companies/products/services would prosper in an economy where money maintained its value.  I also don't think inflation is the necessary evil people make it out to be.

I agree

[ivyhedge]

We love what we do.


Some folks have a grand plan for post retirement that involves fleeing "the man" (awesome for them, if they so dislike their employ). For others, though, "retirement" or "money" isn't the end goal.


I work in finance so I won't self exemplify. We know medical personnel who make serious coin, have great financial health, and would "check out" if they stopped working. They love it. A friend is a first chair in a major world symphony. She never wants to stop. We have several engineers in the family who tried to retire ... and then ended up forming consulting firms and run them late in life. Another member of my family is a writer some of you probably know well - he'll die with a pen in his hand. And another is a dean at a college some of you have attended - he loves his work.


Yes, these are anecdotal. But, if just in my family, I can think of 8+ folks who realize that retirement isn't an end to itself, there are others (especially at the early age of 67, which I don't consider old): many others.

[DollarBill]

2% is probably the target set by the Fed because it is generally recognized in economics that you want small amounts of inflation and you want to avoid deflation.  If set the target for 0%, it would be too close to the edge and you easily risk having deflation. 

Inflation, in small amounts, is good for a nation's economy because it is encourages consumption.  People's money is worth more today than it is in the future, because tomorrow's prices will be higher for the same good or service.  For example, if I buy a shed for my house it may cost $800 this year but if I wait until next year if may cost $820 for example.  Thus the population as a whole is  encouraged to use the money immediately to purchase goods which helps employment and help grow the economy.

In a deflation period, prices are falling, thus people tend to hold on to their money and not buy anything because they are waiting for the lower prices.  Thus, it encourages too much hording of money on a national level when it turns hurts consumption and employment.

Interesting points...thanks

I don't see why it's so hard for some people to understand that some other people actually enjoy the work they do.

I think it's hard for me because most of the jobs I've done during 22 yrs with the Military have not been too enjoyable. I've always thought I should have done something different but chose to stick it out. I'm glad I did but it really sucked the life out of me. I'm retiring soon so I'm hopeful I can find something that I enjoy doing.

[Paul der Krake]

I wouldn't retire either if someone was crazy enough to give me the keys to one of the most powerful non-elected offices in the most powerful country in the world. How many people can claim to have the world's largest economy at their fingertips?

[shotgunwilly]

I wouldn't retire either if someone was crazy enough to give me the keys to one of the most powerful non-elected offices in the most powerful country in the world. How many people can claim to have the world's largest economy at their fingertips?

I wouldn't touch them with a ten foot pole.