Quote:
Originally Posted by antlercarver
Don`t be fooled by numbers. Dad sold some land for 16000, the new owner kept
for 25 years and sold it to Ducks unlimited for 265000.
When Dad sold the lad, he bought a new truck for $2600, which means he could have bought about 6 trucks. When the new owner sold for 265000, he could have bought about 5 trucks. He also had to pay capital gains tax.
The guy Dad sold to did not gain a quarter of a million, he actually lost purchasing power.
|
Sounds good but you are dead wrong. If your Dad put that money in his mattress for the last 25 years he could now buy about 1/3 of a new pickup. The simple fact is, the price of everything keeps rising. To stay ahead of inflation you have to invest in assets that yield more than the rate of inflation in after tax dollars. If they also pay you a regular income over and above their gain in value, all the better.
Think I am exaggerating, talk to anyone that retired 20 years ago on a fixed pension of 2500 a month. Their property taxes alone have more than quadrupled. Add to that the increases in everything else. What was a pretty good livable income is now bordering on the poverty line.