Re: investing reserve funds
From: David Heimann (heimanntheworld.com)
Date: Thu, 16 Aug 2018 07:53:36 -0700 (PDT)

Hello,

Actually, consumer price inflation is running a bit less than 2% per year. The Fed has been trying in recent years to get inflation up to 2% without much success, but with the economy going well and heating up a bit recently, it probably will happen now.

The general wisdom is that a roof lasts 20 years, and that's what we're providing in our reserve funds. That way, we'll be able to replace the roof in 2025, twenty years after move-in, without any impact on current expenditures.

Regards,
David Heimann
Jamaica Plain Cohousing


Date: Thu, 16 Aug 2018 05:01:33 +0000 (UTC)
From: Brian Bartholomew <bartholomew.brian [at] yahoo.com>
To: <cohousing-l [at] cohousing.org>
Subject: Re: [C-L]_ investing reserve funds
Message-ID: <767083831.8846532.1534395693439 [at] mail.yahoo.com>
Content-Type: text/plain; charset=UTF-8

Keep in mind, that if your money isn't earning interest somewhere,
you are actually losing money every year.

I hear consumer price inflation is running 8%/year.  Does a roof wear
out faster or slower than 8%/year?  Maybe you would be happier with a
new roof now, than with a new roof in 15 years after 2/3 of the
purchasing power of your reserve fund has been taken by inflation.
Likewise for commercial kitchen appliances, heating and air, plumbing,
paving, well drilling, solar power, or other durable goods which might
wear out and lose value more slowly than the dollar.

Brian


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