This is why

My friend the homebuilder has been waiting for a hinge for the last three weeks. A hinge. Can’t get it. Still on order. In America.

You can’t buy a home now and seriously expect to be doing any kind of remodeling work with a straight face. The cost for everything is up 100% plus. Everything. You’re certainly not walking into a car dealership and getting a deal on an SUV. You want it, you’re paying top dollar. There are no factory rebates built into the leases because rebates aren’t necessary – there’s no supply and infinite demand.

These are examples of a wider phenomenon. Some of these issues will be transitory and some won’t.

Irregardless, take a moment to recognize the fact that this is why we’ve been telling you to invest. Us, meaning fiduciary advisors who know what they’re doing. All over the country. This is why.

The S&P 500 has been compounding at 14% per year over the last ten years. That rate of return, which was not expected by anyone and should not be expected going forward, turns $100,000 into $370,000 if left alone. There have been people doing their best to talk you out of taking stock market risk, or convincing you that you could hedge it away while still earning the same (or better) returns. This is now and has always been a fantasy – risk-free reward is the domain of the charlatans. It only exists on Twitter, not in real life.

Stock market returns took your savings from ten years ago, nine years ago, eight years ago and kept them competitive with the prices in today’s economy. They allowed your dollars from 2011, 2012, 2013 to keep their purchasing power. In a moment like this, that’s meaningful. You should be able to pay this year’s living and traveling and eating and entertainment expenses without much aggravation so long as you’ve been invested all this time.

And if you haven’t, well, hopefully the lesson has been learned. Why am I taking the risk of volatility in the stock market? This is why. Prices in the real economy go up. Your money has to go up too.