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18 minutes ago
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I Asked ChatGPT To Explain Why Inflation Is Killing My Wallet Like I'm 12
Inflation isn't a four-letter word, but the way that everyone from economists to TV pundits to politicians talks about it, it might as well be. Even if you don't know exactly how inflation works, you've heard enough to be concerned about the sucker punch it could potentially deliver to your wallet. Still, you want to know more about why inflation should be such a concern, and you don't want a lot of jargon. Find Out: Read Next: Well, your friendly neighborhood financial writer — that would be me — decided to conduct a thought experiment: Why not ask ChatGPT to explain it to me like I am 12 years old? Normally, I'd go to professional experts or do a more complete deep dive online, which is what you should do, given that ChatGPT is far from perfect. Still, it did give me a baseline explanation that anyone could use to build deeper knowledge. Juice Boxes, Really? OK, ChatGPT did not start off great because it invited me to consider buying my favorite juice box for its current hypothetical price of $1. When I was 12 years old, I was all about Polly Pocket like a discerning child. Anyway, ChatGPT continued its explanation by stating that if I have $10, I'm able to buy 10 juice boxes at their current price. 'Easy math, right?' ChatGPT responded. Que the 'Jaws' theme: 'But then… inflation happens.' Check Out: What Is Inflation, After All? For all the chatter about inflation, it's very seldom defined in ways that the average consumer can understand. ChatGPT put it very simply: 'Inflation means prices go up over time. So now, the same juice box costs $1.25 instead of $1.' Given how important an accurate definition of inflation is to our overall thought experiment, I decided to go to other, more official sources to confirm. The International Monetary Fund (IMF) also defines inflation as the rate of increase in prices over a period of time. 'Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country,' the IMF explained. 'But it can also be more narrowly calculated–for certain goods, such as food, or for services, such as a haircut, for example.' Back to our scenario: Now the price of my beloved juice boxes has gone up, but I still only have $10. I can only buy eight juice boxes instead of 10. 'Same money, fewer juice boxes,' ChatGPT proclaimed. 'That's inflation hurting your wallet.' Why Does It Hurt Me? Well, in a nutshell, my money doesn't stretch as far as it used to. I can't buy as much stuff as I used to — whether it's juice boxes, Polly Pockets or, when I'm a grown-up, other goods and services that aren't as fun but essential — with the same amount of money. 'If you don't get more money (like a bigger allowance), you're basically getting poorer without doing anything wrong,' ChatGPT explained. Instead of allowance, think of your salary (which is kind of an allowance for grown-ups). If your salary remains the same, but inflation drives up prices, you're essentially looking at a juice box situation of your own. So, What Do I Do About It? That's the $6 million question (or maybe more like $8 million question, these days). Learning how to stretch your dollar further should be a conversation between you and your financial advisor. But when I asked ChatGPT for a few suggestions, it gave me some ideas. 'Let's say you keep $100 in a piggy bank. If inflation is 5% per year, then after one year, your $100 only feels like $95 — because everything costs more now,' it said. 'When you're older, use a savings account with interest (so your money earns more).' Most likely, ChatGPT was referring to a high-yield savings account, which is a great way to make your money grow in savings. ChatGPT also recommended that I learn about investing, since the stock market usually grows faster than inflation. Again, this is something you'd want to review with an advisor, but as a personal finance site, we can confirm that it's truer than not. While ChatGPT should not be the be-all, end-all of your explorations into money matters, I did find that it gave me an easily understandable definition of inflation. More From GOBankingRates 5 Old Navy Items Retirees Need To Buy Ahead of Fall Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on I Asked ChatGPT To Explain Why Inflation Is Killing My Wallet Like I'm 12 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
William Blair Retains Buy Rating on EPAM Systems Following Q2 FY2025 Results
EPAM Systems, Inc. (NYSE:EPAM) is one of the Best Affordable AI Stocks to Buy. On August 7, William Blair retained its Buy rating on EPAM Systems, Inc. (NYSE:EPAM), with no price target on the stock. Maggie Nolan from William Blair kept her Buy rating on EPAM following strong Q2 FY2025 financial performance and strategic initiatives. The company posted revenue of around $1.35 billion, growing 18% year-over-year and exceeding estimates by $20.09 million. EPAM achieved its third consecutive quarter of positive organic growth during Q2, with a 5.3% organic revenue growth from a year ago. The company is expanding its market-leading position as an AI-native transformation company. With its AI-native revenue rising in double digits sequentially, Nolan believes that this will help EPAM secure new business opportunities. A close-up of a digital cloud, signifying the expansive reach of the software-as-a-service solution. The analyst is also optimistic about EPAM as the company expects its FY2025 year-over-year growth rate to be in the range of 13-15%. Whereas organic revenue is projected to grow between 3-5% in 2025. The positive outlook is backed by EPAM's continued organic growth and above-consensus guidance for Q3 FY2025. EPAM Systems, Inc. (NYSE:EPAM) is a provider of digital engineering, cloud, and AI-enabled transformation services. EPAM is also a business and experience consulting partner for international enterprises. While we acknowledge the potential of EPAM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
2 hours ago
- Yahoo
Dave Ramsey Tells Divorced Dad With 2.25% Mortgage to Take Out HELOC to Get Ex-Wife 'Off Your Back'—But Says He's Keeping the House for the Wrong Reasons
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. It's not every day Dave Ramsey tells someone to take on debt. In fact, his entire brand is built on helping people get rid of it. But when a recently divorced dad called "The Ramsey Show" asking if a home equity line of credit could help him pay his ex-wife her share of the house, Ramsey surprised him with a rare "yes" — followed quickly by a reality check. The caller's situation was tight. He owed his ex-wife $150,000 for her half of the equity in their home. He had $70,000 saved but needed the rest by the end of August. His first mortgage balance was $110,000, the house was worth about $430,000 to $440,000, and his interest rate was a jaw-dropping 2.25 percent. His solution? A HELOC — short for home equity line of credit — which allows homeowners to borrow against the equity in their property and pay it back over time. Don't Miss: . . "I don't tell people to borrow money," Ramsey told him, "but you're already in debt. You're in debt to your ex-wife, and we're going to change that to another kind of debt called a HELOC." In other words, he wasn't advising the caller to pile on more debt, just to restructure the kind he already had. "Get her off your back," Ramsey said. Then he pivoted to the bigger question: "Why are you keeping the house?" The caller explained that he loved the home, wanted to keep his kids in the school district, and thought stability was important for them. Ramsey didn't buy it. "Neither one of them care," he said of the children, ages four-and-a-half and five months. "You're the only one that cares... A 5-month-old does not have any feelings except food and wet diapers." Co-host George Kamel suggested a hybrid approach — take out the HELOC, list the house, and use the sale proceeds to pay it off and put the remainder toward a new place. Ramsey agreed that was worth considering, especially for one very human reason: "Your next wife probably doesn't want to live in the house where your ex-wife used to live in the same bedroom." Trending Now: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's how you can earn passive income with just $100. $100k in assets? Maximize saving for your retirement and cut down on taxes: . While Ramsey made it clear the caller could keep the home if he wanted, he stressed that after decades of financial counseling, most people in this situation keep a house for the wrong reasons. "Five years from now," he said, "your world will look completely different. And it probably involves a different house." For homeowners in a time crunch like this caller, a HELOC can be a flexible option. Lenders such as Rocket Mortgage offer traditional revolving HELOCs for those with at least 15 to 20 percent equity, letting borrowers tap into their home's value for large expenses and repay as needed. The company is known for upfront, transparent closing costs — typically between 2 and 5 percent — which can make the process smoother during a stressful financial pivot. In this case, the math made sense. The emotional math was trickier. Ramsey's advice was blunt but compassionate: it's fine to take out the HELOC, fine to sell the house, and fine to move on. What mattered was not clinging to a property out of sentiment when the wiser move might be starting fresh. And while a low mortgage rate is hard to walk away from, Ramsey reminded the caller that sometimes the right decision isn't about the percentage — it's about the peace that comes when the debts, and the baggage, are gone. See Next: . . This article Dave Ramsey Tells Divorced Dad With 2.25% Mortgage to Take Out HELOC to Get Ex-Wife 'Off Your Back'—But Says He's Keeping the House for the Wrong Reasons originally appeared on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
