Arborbridge wrote:I think looking at it in real terms is not helpful, I want to know what is happening after inflation as that same inflation will impact how much income I need.
Wizard - is that what you really mean? Normally, we refer to looking at something in "real terms" meaning "after inflation", so surely that is helpful? - in fact it's what one needs.
You're right Arborbridge, I managed to get it a bit around my neck, apologies. All I am trying to say is that income growth is not needed for its own sake, but only to ensure that income continues to cover costs in a world where costs tend to rise. If there was no increase in costs a flat income would also be fine.
Arborbridge wrote:it is a perfectly good investment for income purposes if my costs also remain flat in real terms?
I'd say that's a really big IF My costs are surely rising faster than Sainsburys dividend and probably faster than the "official" CPI.
I do not understand why it is automatically the case that your costs rise faster than Sainsbury's dividend. Are you meaning given Sainsbury's historical dividend growth?
Yes, of course CPI or any official measure is a crude proxy for any individual's cost increases year-on-year. But why do you think your increases will always be higher? The BBC used to have a tool on their website that allowed you to unpick CPI and calculate your own personal inflation rate, mine always came in below CPI at that time. Of course it may be above CPI at others. Whether it is higher or lower just comes down to what your costs are made up of compared to the CPI bundle.
Terry.