COLI - is it the Real Thing?

ABOUT THIS EPISODE

COLI is the Cost Of Living Index. It's related to inflation and is an indicator of how much it costs to live in different places. It's important to understand how this affects your life and your investment portfolio. John asks a great question, "What is your personal inflation rate?" 

Welcome to the building life podcastwith John Brown, build your life as a relaxed and unedited conversation withfinancial expert in number: One Amazon, Best Solon author, John Browning Jones,the founder of Guardian rock well and serves clients across the United States.Johns the author of the book, build a life, not a portfolio, a guide to yourfinancial future, based on your personal values, which you can purchaseon Amazon or stay around to the end of today, show and I'll. Tell you how toget a fee copy mild right to your door. I Mitelli Your House for the next fewminutes as we chat with financial expert and business owner John Brownie. Well, John Browning. Welcome back toyour podcast this week. How are you today I'm doing fantastic? It's a greatday. I love it. That's a great answer. It is a great day I brought with me adrink and it's a as a generic drink. It's a hundred percent natural sell, soI like carbon and water and this ones...

...flavored and most people think I'mweird, but I like it, but I grew up John. I know I am, but I grew up during the cola. Wars,remember the Ol wars yeah and we probably all remember those and all theblind taste test and all that. So we all we on't know what a Cola is. If Iask for that, but we're not going to talk about colas today or soft drinks,but we're going to talk about something very similar called a Cole and a lot ofpeople don't know what that is, because when I mentioned that to them, they'relike what is a Collie, did you mispronounce it? No, no ACOLI? Well youall! Let you explain because you're the you're, the expert on this podcast andtell us what a cold Lee is well. This is what- and we touched onthis and some other episode of the podcast- and this is your post ofliving index. Okay, be with a lie: Okay and it's really related toinflation, which we have heard a lot...

...about recently got really a since cold we'vekind of gone through the Covin the pandemic and then the the time period. After that, a lot of alot of folks, a lot of businesses ordering a lot of supplies, kind oflike oh we're, free after the pandemic. So what? What does that mean for inflation?There's a large amount of demand that not as much supplies why hasn't caughtup yet so there's some debate as to whether you know is inflation really ashigh as it seems, because currently, I think the most recentmonth shows it inflation, which is measured by C P. I,which is the consumer price index that the government uses when you can findthat if you go out to the B Ls, the bureau of the Labor spatiis do go. Ibelieve website you can find all this.

The information that I'll H that I'llshare with you, but I believe it's about five percent right now: okay, so and that's inflation, that'sinflation and that really reverted back to that cost of living. What does itcost to live for for you or for me? Okay, so case in point all right, so myson, my eldest son and his wife, live in Cameria California. I live in LittleRock Arkansas. The cost of living is a little different right that so there'san index out her that says month, but a gallon of milk in Arkansas is a dollarthirty. Two and a gallon of milk in California is four D and eighty twocents or something like that. Right is that kind of what it is for US latepeople and that that's right and that's and by the way, having lived in Hawaii,I can tell you a gal o. The milk is closer to six dollars. That's like a a pound man, yeah yeah,it's painful and in Hawaii, but the...

...weather, maybe and and the scenery,maybe maybe it's for a yeah that off sat so coli is so so you need to know thecost of living index. That's tied to inflation and inflation is how how much spending power my dollar has.Is I mean? How do you write and how much is it rising over time and and as we look at there's a there's, abig debate out there right now. Are we going to see deflation? Some peoplethink that and other people say oh, this is massive inflation ever seeingright now. What are you talking about? You Deflationary people. What are youtalking about and I think there there's there's two interesting aspects of this-that the most on either far side of either argument. I always, I alwaysseem to find the the right answer, some...

...where, in the middle of the CO sidesright so, first of all the bond market, thoseguys are really smart. There's trillions of trillions of dollarsflowing around out there, there's more and more there's more money in the bondmarket, a lot more money in the bond market than there is in the equitymarket and those guys kind of know what they're doing over. If you look backover decades and decades, and if you look at where the ten year treasureyields now, it's still very low, and that means bad the bond, the guys, those really smart,guys are saying that inflation is really not so much of a problem. So, look at that and I put a lot ofweight on that, so those guys have been right for a long time. Inconsistently and the other argument for deflation isthe this idea that we have so much innovation coming online and it'sdropping those costs so fast that it's...

...actually going to lower the price ofsay your car that you're driving in all that now. Here's the big issue, though,depending on who you all are and where you are in life and not to mentionwhere you are, with the cost boding in deck, but for TA, an holder person as we agewe tend to have higher medical expenses, will the cost of medical care thatinflation has traditionally been significantlyhigher than the overall inflation. So older people may have a differentinflation in thet. In other words, when you retire and you're trying to play inyour budget how much you're going to spend it might be significantly higherthan your thinking, because a bigger portion of your income is going to gotowards medical expenses with our giving it a faster rate. Okay, sothey're in exploding. One of the myths that we'veall grown up with is that when I retire, I need less money than when I'm working...

...yea. Exactly exactly just to give you acouple statistics on that. Over the last five years, health care inflationhas moved higher on average by two point: four seven percent, while overall inflation was up twopoint, one percent, which doesn't seem like a lot, but when you compound thatover the years it becomes significant, yeah, so UN all right so, and this is why peopleneed to just talk to you, John, because you're making my brain hurt so you've got to understand or at leastunderstand the cost of living index at some level. But then you add, on top ofthat or next to it or connect the dots of inflation and how that's going tohelp or hurt my buying power today, tomorrow, the next year and look downthe road a little bit say: Okay, compounding that, what's it going tolook like in the future, because our medical cost is going to go up or downin the future. Well, my guess is up, I...

...don't know, but I need to be planningfor that now, so that I can be ready, then exactly and what your person reallyconsider what your personal inflation is going to be like to yeah, because insome ways have you ever heard of a regressive tax? Have you ever heard ofthat? No so a regressive taxes when governments or municipalities, taxthings like food, so necessary items, no matter where you are on the incomescale. Okay case, it hurts disproportionately lower income people and these things that the argument isthey're going to actually decrease in cost like your teslas are actuallygoing to be cheaper to drive cheaper to alone cheaper to operate, so they say- and it looks like that'sthe case so far, then your your older vehicles well somebody with a lowerincome...

...not going to be able to for that brandnew test fla, but arguably it would be cheaper for them if they could affordit. It's kind of a cometoo mind around, but this in this inflation versusdeflation is really kind of a regressive tax on the middle and lowerincome. Individuals- hmm that's another thing to consider you: what is yourpersonal inflation looking life as opposed to just what they publish inthe news and talk about, which is the C P? I okay right a great question yeah, because I'venever thought about it of what is your personal inflation rate?Is that kind of? Would that be the right question? That's right, yeah,exactly Huh! I've never thought about that. I'vealways just thought of inflation around the the you know as a macro thing, nota micro thing right, I it can be- and...

...this like this is why it's it becomes.I want to call the complex adaptive system right, it's not complicated andthat there's an answer to it. It's complex there's, so many differentideas like go into and we did a whole podcast on the complex adaptive systemthat you can go back and find because it was really complex, but you made itsound, so simple, but Cola not call a Cole cost of livingindex is a number that we can find online, probably yeah inflation rate wecan find online, but to really really understand that we need to just reachout to John Browney, because you understand the stuff and- and it's justpart of the whole investment portfolio that you help your clients do when you,when you're working with them, because you have that relationship to knowwhere they are in life and what they're wanting to do in life and how? How thisI mean. This is really fascinating topic, because it's not most people,think of an invested in adviser advisor. Like you, a financial adviser dealingwith stocks and bonds and musial funds...

...and and all that stuff. I don't knowthat I've ever factored in cost of living index and inflation intothat whole picture. So that's very fascinating, but that'swhat you do yeh! That's! What I do every day, Ithink about all that cool stuff, yeah. Okay, maybe it's not that cool allstuff yeah! You just definitely got the Gee cat for today. I am so grateful to God for you jobrunning in people like you, because that would drive me baddy to try tounderstand how that. But you love it and that's why people need to reach outto you and have discussions. This is not a one time I mean that's thing.They're going to reach out to you. John, is not a sales call you're not going toask them to sign on the dot of the line, you're going to have conversations andsee, there's a fit see if you can help people, because you C N, you don'tthat's the thing, you don't give any financial advice until you have aclient relationship and that that's not going to come on. The first call.That's going come through a series of conversations and your five wise andall those other fun things to build the...

...relationship with that person so thatyou can help them build a life, not just a portfolio which is the title ofYour Amazon Best Ellin Book. By the way, people can ask you for a copy of that,that's right, which is really intriguing. It's very, very good book, but yeah just reach out to John Thecollie. Ask Him about the Colie wars and see where he goes there, and andmaybe you will have a picture of one of those star wars- things that's kind offun. That's right! We should be that would be fun but cost of livinginflation and where is it going, and how does it affect you personally? Well,who knows well, John Brownie nose. So let me encourage you just reach outGuardian Rock Wealth Com as how you can get a hold of John and listen to thispodcast again reach out to him schedule and employment. Just have aconversation and you'll be amazed at what he knows and how he can help youbuild a life not just up or folio johnny, any last parting cots commentson Collie or inflation, or anything elsewell, just remember as you're as you're...

...thinking through these things thatinflation and cost of living are real items that are kind of like a silenttax on your earnings and if you are living scared, is what I call it andyour your fording cash, because you're so afraid of the politics, the world,the situation and all that just realize that you are likely losing money almostcertainly losing purchasing power on the dollars that you're holding inyour bank that you consider your safe assets. So just be careful how much ofthat cash it can make a significant difference in as you build your life, that's the what you're be able to do.That's great, we'll do a whole episode on that. I've got some ideas aroundthat, but we'll talk about that on anotherepisode. This has been fascinating...

...talking about Collie and inflation.It's been very helpful to me. Help me understand a few things of JohnBrowning Guardian Rock wellcom. Thank you so much again for a great episode.All right, we'll see you next week. Money really is a big part of our livesand John Browning can help you and your family learn how to keep money in theproper perspective, it's important, but it's only a tool that can help youbuild the life that you want. If you like, John, a Melo free copy in hisbook, build a life, not a portfolio, go to John's website, Guardian Rock WealthCom and click. The contact US link and send your request. John Will Mellacopied his book right to your door. Absolutely free thanks for listening tobuilding your life, podcast with John Brownie be sure to subscribe to thispodcast. So each new episode will be sent to you auto magically when it'sreleased have a terrific day.

Nothing in this podcast should beconstrued as personal investment advice and past performance is no guarantee offuture results. Investing is not appropriate for everyone. There is arisk of loss associated with investing in the markets. No representation orimplication is being made that using any methodology or system will generateprofits or inter freedom from losses. Please remember that INVESTING CARRIESRISK GUARDIAN ROCK WELL LL C and its affiliates are fiduciary investmentadvisers. Please consult with us or another experience, qualifiedinvestment adviser before making any investment decisions and or trying toimplement any of the strategies and tactics we may discuss in any of ourpublications or podcasts.

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