What's up guys, it's graham here and welp things got worse for anybody looking at their portfolio wondering why they can't seem to make it green, unfortunately, turning it off and on again isn't gon na work, because inflation just came in significantly worse than expected throughout every single Category having just increased at a rate of 8.6 year-over-year, this was the largest increase since december of 1981. It broke recent records for both food and energy. Housing saw the biggest surge in over 20 years, and the strangest part about all of this is that it might not even be entirely accurate. The reality is cpi doesn't factor in the specific purchases that most of us make on a daily basis, and that means there's a stronger chance of more rate hikes coming soon, a lot higher than expected.

Anyway, it's become clear that the situation is not going away anytime. Soon so it's important to talk about how much worse this could get how long this will continue what's going to happen and how to invest your money in such a way that it doesn't evaporate into thin air, okay, whatever andre drake, does it better, although before we Start in the spirit of inflation, it would mean a lot to me if you inflated that, like button for the youtube algorithm by giving it a gentle tap doing that helps me out tremendously and as a thank you for doing that, here's a picture of a pufferfish. So, thank you guys so much and also a big thank you to public.com for sponsoring this video, but more on that later. First, we got to clear up the confusion when it comes to the inflation report, because, even though we see an increase of 8.6 year-over-year that doesn't tell us the entire picture, and it's really important that everyone understands exactly what this means on a really basic level.

Inflation is simply the rate that products and services increase in value over time, lowering the value of your money. Today, it's generally thought that the more money gets printed into the economy, the more we devalue the existing currency in circulation and over time, the more dollars it costs to buy the exact same thing simple right now. Historically, inflation is nothing new and it's something we've been seeing each and every year since the beginning of time. In fact, the years we don't see, inflation is usually associated with a recession, but for the last 100 years, inflation has really been the backbone of our economy, and it's exactly why, in 1963, the median cost of a home was seventeen thousand eight hundred dollars.

Whereas now it's 428 thousand dollars or how a big mac was 65 cents in the 1970s, but today it's 5.81. However, here's where things get interesting, even though we know prices are rising at an incredibly fast rate, the real mystery comes with how inflation is actually calculated, and maybe it's significantly higher than most of us are led to believe. Actually, in fact, it is higher than most of us believe and here's. Why see? Inflation is not just a one-size-fits-all approach across everything.

After all, if the price of rolex and patek philippe watches increases a hundred percent, because people want to flex on instagram, that's not appearing on a list showcased by the federal reserve, while they rapidly raise rates so that more people could buy rolex watches. Instead, inflation is measured by the essential products and services that people consistently use on a daily basis, even though i guess you could say for some people rolex might be essential, but that's besides the point, the main category that gets the most attention is what's called cpi Inflation, which stands for consumer price index, this covers the weighted average of the most frequent purchases and is tracked on a year-over-year basis every single month as a simple way to visualize it. Just imagine that you have a grocery basket of 10 items and on a regular basis. They compare the current cost of that basket with the prior month.

If that basket costs more than we've seen inflation and that's reflected in the headline number that we see here, but unfortunately, here's where things take a turn for the worse cpi may not be accurate, and it could very well underestimate the true impact of inflation, meaning some Could say it's potentially way higher than we're led to believe. After all, there have been numerous revisions to the cpi leading people to believe that it's carefully crafted and manipulated to show what they want us to believe, not what it actually is and in a way, i have to say objectively they're kind of right. On the one hand, cpi is adjusted to account for all the extra features that weren't available 10 or 20 years ago, like the fact that all new cars are required to have a backup camera. Every aspect of cpi is constantly being adjusted to account for quality increases.

Quantity, decreases, new features and keeping that as consistent as possible, but there are a few complaints that stand out a lot in terms of why this is not the full picture. First, cpi numbers are adjusted to consider the fact that, when prices rise, consumers could switch to less expensive alternatives as a way to save money, and this switch is calculated in the overall amount. That's shown here sneaky right like take. For example, you always buy pepperage farms.

Cookies at the grocery store for five dollars, but over time that increases to six dollars to seven dollars to eight dollars. Well, inflation numbers won't count that increase if consumers have the option to switch to a less expensive alternative like kroger cookies at five dollars. In this case, inflation could be shown as zero percent, even though in reality, it's not second in terms of housing, they base this on, what's called owner's, equivalent rent. This is obtained by asking homeowners.

If someone were to rent your home today, how much do you think it will rent for monthly unfurnished and without utilities? Of course, this brings a major concern that homeowners may not know what their home can accurately rent for, and it's entirely dictated by opinion and not actual data. For instance, in the latest cpi report owner's equivalent rent rose a solid 0.6 percent, which would imply a seven point. Two percent increase meanwhile realtor.com pegged dear rent growth in march at 17, while zillow's observed, rent index grew at 16.8 percent. The bureau of labor statistics also counts their rent on a survey asking tenants.

What is the rental charge for your household for this unit, including any extra charges for garage and parking facilities? This does not take into consideration what the owner would charge at market value if the tenant were to move out and that, in turn underestimates just how far rents have really gone up. This is incredibly important because shelter makes up one-third of the entire inflation index, and if this number comes in lower, it dramatically skews the true inflation that we're actually seeing to show you just how much take a look at this chart here, which compares the shiller price Index to that of owner's equivalent rent and you can see just how far apart they are. And finally, third, we have a metric called core inflation which excludes food and energy, because those are known to be more volatile based on outside factors and they're also considered to be staple items that are consumed on a regular basis, regardless of how much they cost. In this case, gas prices are up 50 percent year over year from increased demand and limited production, and grocery prices are up nearly 12, reflecting the largest 12-month increase in 43 years point being.

Inflation is extremely difficult to calculate because, yes, even though there are ways to switch to cheaper alternatives, truth be told the actual number for someone making no adjustments whatsoever is likely significantly higher than what's being reported. However, in terms of what's going on right now and what this means for you, your money and your investments, here's what you need to know. However, before we go into that, as i'm sure, you've noticed, the market continues to be extremely volatile, although one of the best ways to mitigate that is through consistent. Investing all thanks to our sponsorpublic.com they're, an investing platform that helps people be better investors on public.

You can invest in a multitude of stocks etfs and over 30 different cryptocurrency options and soon art, nfts, collectibles and more, what's even more helpful is that they give you real-time information on your portfolio and the markets to help you invest with context. For example, the news alerts give you timely updates on why certain assets are going up and down and their live audio feature allows you to hear from experts, analysts and journalists about the important news updates of the day. Public also just launched the waitlist to their first subscription, offering public premium where you can get advanced data, unique market, metrics and analyst insights. You'll also get access to morningstar's industry-leading performance data, receive guidance from experts on what the bulls and the bears have to say and vip customer support with real people in the us for just ten dollars a month and complementary access.

If you have a portfolio balance over twenty thousand dollars, plus you can follow me on the platform to read my thoughts on the market every single week and as a way to give back. They want to invest in you by giving you a free stock worth all the way up to a thousand dollars just by signing up and making a deposit with the link in the description and using the code gram. So if you want to build your portfolio and start investing in stocks, etfs and crypto today, the link is down below in the description, and now with that said, let's get back to the video all right now as far as what's going on today, the biggest concern In terms of you, your money and the stock market is that higher inflation readings increase the likelihood of a larger rate hike when the fed meets in june july september november and december, and that's seen as a negative for stock values as borrowing gets more expensive, see. Prior to now, traders were pricing in just a 3.6 chance of a 75 basis, point rate hike in june, but after this report they see a 13 chance of that coming in just the next few days.

Another report shows the chance of a 75 basis. Point rate hike has increased to 50 in the following month of july, which is substantially higher than the 50 basis point rate hike that we were hoping for. In other words, the one thing the market, absolutely hates, is uncertainty, and when inflation comes in significantly higher than expected, the market tends to price in the worst possible case scenario, and your portfolio sees a lot of red as a result. After all, the more interest rates increase the more expensive it is to borrow money.

The higher mortgage and auto rates get the more it costs, businesses to finance their operations and the more likely we are to see them cut back, resulting in a recession beyond that, though, i want to share my own thoughts on this, because very rarely do i speak From the heart, without all of these charts and figures, backing up my claims - and i just think this needs to be said since the very beginning when i started talking about personal finance here in the channel over five and a half years ago, i've consistently said to Buy the dip on a regular basis throughout a diversified index fund, regardless of where the market is trading at and even though the headlines might be spooky. The truth is no one knows what's going to happen and it's best to ride the entire market, all at once. Over the long term that advice still holds true today and i have not changed my investment schedule at all. Since i started buying real estate in the beginning of 2011., i have never timed to the market.

I have never sold an investment without the purpose of either tax loss, harvesting or for a better opportunity, and i have no intention of changing anything in terms of how i invest throughout these next 10 to 20 years. However, i will say this from my experience, both throughout working in real estate in 2008 and watching the markets collapse in 2020 at first. It's really easy to think this is awesome. Everything is on sale right now i get to buy everything cheaper.

What more could i ask for i mean the truth, is i agree with this completely and it's the best mentality that you could possibly have during times like this, but i have a feeling if things get worse, sticking with that strategy is not going to be easy. The market is known for crushing souls and making you feel like a complete idiot when you buy something and it falls and you buy more and it falls more and you keep buying and it keeps falling, and then you think to yourself i'm doing everything wrong. This time is different. I suck i'm just gon na wait.

It's gon na be a real testamental endurance and strength to stick with a strategy that should logically work over the next 10 to 20 years, even though there are going to be times when you lose on your investments, each and every year, without making a profit for Multiple years in a row at least just be aware that all of that is normal, it will pass eventually and long term. No one can predict what's going to happen in the market. Even the harvard business review found that the brightest minds and most complex algorithms in history couldn't do it. So what makes you think that anyone else can, including me all i will ever tell you, is to continue buying as normal, consistently and in times like this? Do your best to stay employed so you'll have the disposable income to invest.

That's it based on every piece of factual research that we have available to us. That is the most likely way to maximize the amount of money that you make over 10 to 20 years, and everything else is a shot in the dark plus. Don't forget. It's shown that optimists are more likely to live past the age of 90.

Giving you more time for compound interest to make you even more money, so don't worry, focus on what you can control and at the end of the day, the best thing that you could do is to subscribe. If you haven't done that already so with that city guys, thank you so much for watching feel free to add me on instagram and don't forget that you can get all the way up to a hundred dollars of free crypto when you sign up for ftx us Down below in the description with the code, graham, i also have an opportunity where, if you want to invest, alongside with me in real estate, go to creatorproperties.com i'll link to all the information down below in the description. Thank you guys so much for watching and until next time.