tag:blogger.com,1999:blog-6740242246526036863.post8049322551335466527..comments2012-06-11T07:56:38.992-07:00Comments on The Real Truth About Money: How Much House Can You Afford?Jon Gutek, JD/CPAhttp://www.blogger.com/profile/07951152966018347630noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6740242246526036863.post-68365817398817223182008-06-18T12:46:00.000-07:002008-06-18T12:46:00.000-07:00Albert Einstein once said that the most powerful f...Albert Einstein once said that the most powerful force in the universe is compound interest. If he were alive today, he might say it is inflation. With the average inflation rate of 4.1% over the last 30 years, money loses half its purchasing power after only 17 years. Vassar Girl should be thankful that the inflation rate is only single digits. In 1981, the five year average inflation rate was 10.1%.Jon Gutek, JD/CPAhttps://www.blogger.com/profile/07951152966018347630noreply@blogger.comtag:blogger.com,1999:blog-6740242246526036863.post-75151029195231765942008-06-18T11:57:00.000-07:002008-06-18T11:57:00.000-07:00While I was a teacher making $70,000 per year, I b...While I was a teacher making $70,000 per year, I bought a house for $280,000, roughly the 3.8 times gross income described in the article, and paid cash for the house. Now I am retired and living on my teachers pension and social security. My life expectancy is about 30 years. The average inflation rate for the last 30 years is 4.1%. If my property taxes, house insurance, utilities, and upkeep go up 4.1% per year, they will exceed my pension after only 14 years. This is not good.Vassar Girlhttps://www.blogger.com/profile/00879349249450965630noreply@blogger.com