This video discusses one way in which the US government understates the true rate of inflation, using the owner's equivalent rent (OER). Rather than using actual housing prices in their calculation of the CPI, the U.S. Bureau of Labor Statistics uses a survey, asking homeowners how much rent they could collect if they rented out their house unfurnished and with utilities not included. If we use actual rent and housing price increases instead of OER, we find that CPI inflation is closer to 8.92%, rather than the reported 5.28%. All changes to the CPI index have contributed to it understating the real rate of inflation. In this environment, you need to be growing your net worth by at least 8.92% every year just to break even.
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