EP. 3 - How Lifestyle Inflation is Ruining Your Financial Future | Protection USA

Welcome to a new episode of 'Retire Strong and Fearless,' your ultimate guide to retirement and personal finance. I'm your host, Rich Strehl, representing Protection USA. Today, we're on a mission to equip you with the knowledge and strategies to make your retirement truly exceptional. Whether you're at the brink of retirement or just starting out, we're here to embark on the journey to retire strong and fearless, together!

In this episode, we tackle a common financial trap that ensnares many Americans: lifestyle inflation. Did you know that 65% of Americans have experienced this phenomenon? It's a sneaky cycle where your spending gradually increases as your income rises, often leading to a higher standard of living. But beware, it can turn into a financial time bomb!

We'll delve into the gripping story of Sarah and John, a couple who aspired to live a lavish life but almost paid dearly for it. You won't want to miss the shocking statistics that unveil the lurking dangers of lifestyle inflation. Discover the steps you can take to safeguard your financial future and break free from the 'keeping up with the Joneses' trap.

We'll also share insights from the 2023 Retirement Confidence Survey by the Employee Benefits Research Institute, revealing some fascinating statistics on lifestyle inflation:

• Learn what lifestyle inflation is and why people succumb to it.
• Find out which expenses are the biggest culprits.
• Discover how different generations are affected, with Gen X households being particularly prone.
• Understand the alarming trend of Americans spending 23% more each year than a decade ago.
• Uncover why this isn't necessarily a good thing, as it can lead to financial instability and debt.

But don't worry; we're not just here to highlight the problem. We're also here to provide solutions. In this episode, you'll learn practical steps to combat lifestyle inflation:

1. Invest regularly in the market regardless of the conditions: Embrace dollar-cost averaging to make consistent investments, reducing the impact of market volatility and emotional decision-making.
2. Master saving 10% and gradually increase to 20%: Build financial discipline and benefit from the power of compound growth by saving and investing more over time.
3. Inflate your lifestyle slower than your income inflates: Delaying lifestyle inflation can lead to financial independence, giving you the option to work less or retire sooner.

As we wrap up, remember that it's not about keeping up with others; it's about staying ahead. Break free from lifestyle inflation, take control of your financial destiny, and secure your future.

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Disclaimer: Rich Strehl was a licensed financial planner from 2007 - 2014. By design, he no longer carries this license. He is a licensed insurance agent with a lot of strategies, insight and ideas. Our videos are for entertainment purposes only. The information presented should not be construed as financial, tax or legal advice. Always do your own due diligence.