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Big Mac Status Symbol

Big Mac Status Symbol

| May 28, 2024

In the halcyon days of pre-pandemic dining, I used to post pictures of my food to social media. And if you are honest, so did you. It was fun to go to a fancy restaurant with low lighting, obnoxious music and deconstructed cheeseburger with truffle oil infused mung bean paste. It didn’t taste as good as a Big Mac, but the vibe was immaculate.

My, how things have changed. In a recent survey, LendingTree has found that the 80% of Americans now consider fast food a luxury. It used to be that fast food was a way to save time and money for a busy working family. Now that’s not the case. While people still eat out, they are doing it less and eating at home more.

An important point I’d like to emphasize is that government statistics about inflation don’t matter to retirees. What matters is the cost of the things you want or need. It’s called Consumer Pricing Index or CPI. When you track the cost of a Big Mac from 2019 to 2024 you are already including energy, transportation, labor and commodity prices (wheat, cattle, etc). Those are most of the things that retirees need in retirement. The only thing missing is health care costs. Which you’ll need if you keep eating only Big Macs.

The government statistics about inflation, include things that lower inflation. For instance, the cost of computer has gone down over time when you compare computing power and functionality. But how many computers does a retiree need every ten years? Furthermore, the inflation numbers you typically hear about on the news are CPI minus food and energy. Food and energy are kind of essential to a happy retirement.

The cost of a Big Mac in 2019 was $3.99. Today, a Big Mac costs $7.49. That’s an increase of over 87%. Medium Fries are up 134% from $1.79 to $4.19. This is not a solicitation to invest your IRA in French Fries. Rather, I want you to realize you are living in extraordinary times.

One of the things I enjoy doing is taking clients out to lunch on their birthday. They pick the restaurant and the friends they’d like to invite. We don’t talk about their portfolio, we simply enjoy the Big Macs which are cheaper today than they will be tomorrow. If you’d like to partake in a succulent Chinese meal, click here.