Transcript:
Easan Arulanantham:
So this is a question about being concerned about the market: I have a trip booked, you know, my hotel and flight have already been paid for. I have the money budgeted for food and kind of all that entertainment expenses in my bank account. What are your thoughts about canceling this trip? Because, you know, inflation is kind of spiraling right now?
Tom Vaughan:
Yeah, that’s a good question. Because travel is picking up now, I got a lot of clients that are, you know, going out. Now, really, since April, end of this year, all kinds of scheduled trips this summer, and a lot of pent up demand in the travel arena, you know, just because of not being able to travel for quite a while. So, you know, you’ve got this trip booked, right? You’ve already paid for a lot of the pieces. Probably, if you did it right, you could get most of those back. If you had to write especially in this world, I’d be a little careful of not having refundable tickets and what have you, but but I guess I look at it like, well, you’ve already committed to this to the point where you’ve already scheduled it, you’ve saved the money. You’ve already booked the flight, the hotels, you’ve got all these pieces together. You know, life is kind of short, to see you don’t know what’s going to happen going forward. I think if you’ve got a window to be able to take a trip like that, you probably should take it. But inflation is a concern, right? Yeah. So hey, I just spent this money and inflation goes skyrocketing. And I’m gonna look back and say, Wow, I wish I still had that money to be able to afford the basic things that I have thought there are some situations depending on, you know, your overall financial scenario, right? If you’re really close to the edge financially, and you’re pushing yourself even closer with this trip. And a lot of people do that, believe me. But you know, that there may be some argument to kind of getting that money back.
However, the problem I have is that we don’t know what inflation is going to be. Everybody says it’s going to continue to skyrocket, it’s going to continue to go up and up. It’s totally out of control. Not everybody, but there’s a lot of people out there that feel that way. And and I think that you have to be really careful, because we don’t know, I mean, that’s something that’s a bit unknowable. As far as that goes. Inflation did peak so far, in March, you know, we’ve had one month down, which isn’t enough to say we’re going down, but it’s a start. And so you know, what happens next month and month after that. And I guess I would hate to give up a trip, and find out that inflation turned out to not be such a big deal. And it did fall into that kind of two to 4% range in the next six to 12 months, which isn’t great, but it’s better than eight to seven to eight that we’ve been in for a while here. So personally, you know, unless it was a really dire scenario, we probably shouldn’t be taking the trip in the first place. If it’s that dire. Yeah. Then, you know, I probably take that trip. And, you know, one of the things that the question did mention was saving and other areas to kind of make up for it. I think that’s a great idea. Yeah. Right. And there are a lot of places that people can save.
Easan Arulanantham:
Yeah, and especially if you’re, it’s also about living your life, if your mental health is suffering, because you’re still just working and grinding through and not taking this trip is probably a little bit worse in the end. Because even though there’s financial, optimal financial decisions, we should also still be able to make these decisions within boundaries of keeping ourselves happy, because we shouldn’t be sacrificing everything to you know, have that perfect financial outcome. We should be, you know, trying to live our lives while still trying to make good overall decisions.
Tom Vaughan:
Yeah, I agree. I mean, there’s, I have, I have some wild stories from my, my years with clients. And, you know, I’ve met some really wealthy people who have become wealthy, because they didn’t do anything. I mean, even to the point where, you know, they have a car that’s 2030 years old with, you know, 12,000 Miles didn’t even drive didn’t travel. And their big goal in life was to accumulate money, and they bought stocks. And, you know, and their that was their thrill, really, even, I remember one scenario where it was just counting the dividends. That was just that was the fun didn’t need to travel because it could count the dividends. There’s nothing wrong with that. There really isn’t because that’s what that’s what lifestyle meant to that person. So it is different for everybody. But for most people, you know, there’s some kind of balance that people are trying to achieve, because you can go the other way, right where you’re living for the day, spending every nickel that comes in all the time never prepared for any more I can see whatsoever. And, you know, and you know, thinking that life is, you know, just short and around the corner could be some disaster. So I’m doing what I can do now. You know, again, as long as you’re willing to put up with the ramifications of that, that’s okay too. But I do think you need to kind of identify, you know, where you’re at on that spectrum and be able to pick and choose. It’s, it’s, there isn’t a perfect answer for everybody. But it is, I think, probably a balance applies to more people. Yeah.