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Historical Inflation Chart: 10-Year Rolling Average 1872-2022

Advisor Perspectives has a nice chart of 150 years of historical inflation (1872-2022). I appreciate that it includes both the short-term monthly inflation numbers as well as the 10-year rolling average over this long period of time.

A few basic observations:

  • From a long-term perspective, there have been many large sharp spikes in inflation throughout the entire period. Inflation has been a persistently recurring concern.
  • From roughly 1872-1940, there were extreme swings between both high inflation and high deflation. Of course, this was also when the dollar was (mostly) on the gold standard.
  • From roughly 1950 onward, the rolling 10-year average for inflation has still varied from ~2% to ~9% annually. Given our current low 10-year average, inflation could continue to be elevated for many years and not look out of place on this chart.

My primary takeaway is to always stay mindful of long-term inflation risk. I don’t know what inflation will be next month or next year, but I am confident that it’s coming sooner or later. Some applications (my opinion):

  • The 30-year fixed rate mortgage continues to be a great inflation hedge. (Even at high interest rates, that might soon result in lower prices.) As long as you lock in a monthly payment that you can comfortably afford and plan to stay a while, your monthly mortgage payment will only effectively get cheaper over time as inflation eats away at it. If rates drop, you can refinance. If rates rise, you can keep it forever and even rent the property out if you move, as high rates means inflation likely boosted rents while your mortgage payment stayed the same.
  • On the flip side, according to Macrotrends, the a 30-year Treasury bond yielded only 1% a year back in 2020. Long-term nominal bonds became a popular portfolio diversifier while rates were dropping (performance chasing), but in reality they became a ticking inflation bomb. I’m still avoiding long-term nominal bonds today.
  • A lifetime annuity has definite upsides, but inflation will eat away at the spending power over what could be 30 years. Maybe you’ll get older and spend less each year anyway, but I’d still maintain other assets (like stocks) to hedge that inflation risk. I like single premium immediate annuities as a possible tool for retirement income, but not as the only or primary tool.
  • TIPS are complex yet intriguing. I’m still not sure what the best play is right now, but I am happy to keep holding them as part of my bond portfolio. I’m leaning towards moving away from ETFs and more towards a ladder of individual bonds, especially if the real rates on long-term TIPS go any higher.

AllAmerica and Redneck Bank: 4.00% APY Money Market, 4.25% Rewards Checking

All America Bank and Redneck Bank are sister internet banks that offer the same types of accounts (with different marketing shtick). Looking back in my archives, I actually opened an account with them way back in 2009 (later closed), as they are intermittently competitive with interest rates. Looks like they are looking to attract deposits again, most recently raising both their interest rates and their balance caps.

Mega Money Market

  • 4.00% APY on up to $75,000. Amounts over $75,000 earn 0.50% APY.
  • No debit card transactions required.
  • $500 minimum to open an account. No ongoing minimum balance requirement.
  • Must agree to receive online statements only.
  • Limit of one Mega Money market® account allowed per individual. (I believe you can have one account at each bank, though.)
  • Technically a money market checking account which means it includes a debit card (you can pay for checks too) but is still limited to six withdrawals per month. This limits its functionality to more like a savings account.

Rewards Checking

  • 4.25% APY on up to $15,000. Amounts over $15,000 earn 0.50% APY.
  • 10 debit card transactions required per monthly statement cycle. Monthly statement cycle ends on the 20th of each month. If the 20th falls on a Saturday, the cycle will end on Friday the 19th. If the 20th falls on a Sunday, the cycle will end on Monday the 21st. ATM and ACH transfers don’t count.
  • $500 minimum to open an account online. No ongoing minimum balance requirement.
  • Must agree to receive online statements only.
  • Limit of two (2) Rewards Checking Accounts allowed per individual. (I believe you can have two accounts at each bank.)
  • A full-featured checking account with online billpay, ATM rebates (up to $25 per month), and mobile check deposit abilities.

CIT Bank Review: 11-Month No Penalty CD 3.65% APY, Savings Connect 3.60% APY, 18-Month 4.50% APY

Rates went up again 11/30/22. No-Penalty CD up to 3.65% APY if you want to ratchet up. CIT Bank (not to be confused with Citi Bank) is an online-only bank with a multi-year history of competitive rates. They have a checking account, but their … [Read the rest]

SoFi Savings 3.25% APY w/ No Cap, $250 Direct Deposit Bonus, $25 Opening Bonus

Savings rate increased to 3.25% APY on 11/29, $275 promo extended through 1/31/2023. You may wish to transfer funds from Checking to Savings now that the rates are different. Also, if you did the deposit bonus in September, a reminder that you had … [Read the rest]

The Best Health Savings Accounts (HSA) Providers: Fidelity and Lively/Schwab

Updated for 2022. It's open enrollment season, and there is better than a 50/50 chance that you will enroll in a high-deductible health plan. That means that you are also eligible to contribute to a Health Savings Account (HSA), which has … [Read the rest]

Giving Tuesday 2022: Matching Donations and Finding the Right Charity

Tuesday, November 29th is Giving Tuesday 2022, an international day about giving support through charities and nonprofits by donating money or volunteering your time. In case you aren't inundated with mailings already, this time of year is a big … [Read the rest]

Amazon Black Friday / Cyber Monday 2022: Free Amazon Credit Promos

Hope you had a nice Thanksgiving weekend! Enjoyed a little break before the holiday chaos begins. Here are a few low-hanging fruit that caught my eye as I jump back in. Must visit on website to see links. All Cyber Week gift card deals (scroll … [Read the rest]

Discount Magazines Black Friday Sale 2022

The annual Black Friday Sale is one of the few times where they post their lowest prices for the year. The Black Friday sale actually lasts through Monday 12/5, but the Cyber Monday Bulk Sale only lasts through Wednesday … [Read the rest]

Healthywage Review: Bet on Yourself, Get Paid To Lose Weight ($100 Prize Boost)

(Black Friday/Cyber Monday Promo: Click this special link for extra $100 added to your prize through 12/5. They offer up big boosts only a few times per year. Look for the banner on top. Read on for how Healthwage helped motivate me to lose 50 … [Read the rest]

Bilt Mastercard: Earn Rewards For Paying Rent w/ Any Landlord (+Double Points Holiday Promotion)

Black Friday double points for 7 days: From Friday 11/24 12:00am ET through 12/1 11:59pm PT, earn double points rewards: 6X on dining, 4X on travel, and 2X on other purchases (rent is excluded). I'd rather earn 2X Hyatt points per dollar spent than … [Read the rest]

Fidelity Investments: $150 Holiday New Account Offer

Offer increased for limited-time. Fidelity Investments is offering a simple improved $150 bonus for opening a Fidelity taxable brokerage account, Cash Management Account, Roth IRA, or traditional IRA. This limited-time offer ends 12/2; the previous … [Read the rest]

Amazon App: Spin & Win Instant Win Game

Amazon is running a "Spin & Win" Instant Win game (link available online) that only works on the Amazon app and gives you the chance to win a $5-$20 Amazon credit. You can spin once a day through Monday 11/28/22.. I usually don't care for … [Read the rest]