The Insurance Doctor

Tag: inflation

  • Funflation is Here!

    Funflation is Here!

    Recently, I saw a piece covered by two TV stations that mentioned that the “Top of the Rock” was moving towards “Dynamic Pricing!”

    The “Top of the Rock”, also known as the rooftop of Rockefeller Center, is known for its unobstructed views of iconic landmarks, such as the Empire State Building, Central Park, the Chrysler Building, the George Washington Bridge, the Brooklyn Bridge, One World Trade Center and the Statue of Liberty!

    You might be asking yourself, “What does this mean?” 

    Have you noticed in recent years that the cost of attending live events, whether it’s a major sports game, a concert, or a Broadway Show has skyrocketed?  This phenomenon, often called “FunFlation,” refers to the rising prices of entertainment due to increased demand and evolving ticket pricing strategies.

    One of the biggest drivers of ‘FunFlation” is “Dynamic Pricing!”  This is similar to airline and hotel pricing, where vacationers are charged more money during spring break compared to the vacation offseason.  Dynamic Pricing uses an algorithmic model that adjusts ticket prices based on demand, often making events far more expensive than they were just a few years ago.

    The “Dynamic Pricing Model” benefits organizers, artists, and teams by maximizing revenue.  I call it a MONEY GRAB!  It also drives up costs for fans, especially for high-profile events!  Some artists have deflected blame to ticket companies.  The situation is murky at best.

    The “Top of the Rock” is a perfect example of what “Dynamic Pricing” is doing.  I went to their website, which advertises an adult ticket (ages 13+) for between $40-$61.  The prices can change by time slot as the early afternoon prices were $40 each; however, going during the sunset hour can cost $100 each.

    Ticketmaster’s Dynamic Pricing Model can change ticket prices in the middle of the on-sale process based on demand.  In the “old days,” which can be only 3 years ago, ticket prices for entertainment events were fixed, with different tiers based on seat location and venue capacity.  This means that you can buy a ticket, for example, for $100 during a “pre-sale” event that can double in price 15 minutes later, based on demand.  The “re-sale” sites like Stubhub can be even worse as ticketholders can jack up the price even more after or during the ticket sale period. 

    For the first two years of the COVID-19 pandemic, there was no live in-person entertainment.  I remember when major league baseball and NBA teams were playing in empty stadia with cardboard boxes in seats instead of fans.  Once this ended, demand for live entertainment skyrocketed!

    Live Nation statistics show live music stadium shows are up 60% this year over the first two months of 2024.  Numerous artists are planning big tours for 2025, such as Bruce Springsteen, Beyonce (with Post Malone), Pitbull, Sabrina Carpenter, Billy Joe,l and AC/DC (in Europe, not the USA), to name a few. 

    Some tips to avoid being a victim of “Dynamic Pricing” are:

    1. Pre-Sale: Try and budget your time accordingly so you can buy tickets as soon as the portal opens, before “Dynamic Pricing” kicks in.
    2. Check Other US Cities: Often, other cities have much better pricing than major cities such as New York.  For example, on 4/10/2021, we found much better-priced tickets for The Rolling Stones in Pittsburgh than in New York.  We flew to Pittsburgh and stayed in a hotel for two nights for less than it cost to go to the show at MSG.
    3. Check Other Countries:  During the Taylor Swift “Eras Tour,” savvy concert goers flew to Poland for much better ticket pricing and got a mini vacation out of it for less than going to the USA.

             In closing, it makes financial sense to do your homework when buying tickets for live entertainment!  ENJOY the shows!

  • 7 Money-Saving Tips at the Gas Pump!

    7 Money-Saving Tips at the Gas Pump!

    Due to a combination of events including Covid-19, the Suez Canal 2021 container ship backlog, and the current Russian invasion of Ukraine, there are gas supply-side issues that are driving up prices.  At one point, the U.S. was producing enough gas domestically to not have to import any gas from overseas. These are some reasons why we are in economic turmoil today! 

    During the past three months, we hit 40-year highs for inflation over a 12-month period.  From February of 2021 through February of 2022 the inflation rate was 7.9%. 

    What does this all mean?  To examine the rise in the annual inflation rate, we must first go back and examine the recent past.  Look at the annual inflation chart since 2017 below:

    Calendar Year                      Annual Inflation rate

    2017                                       2.1%

    2018                                       1.9%

    2019                                       2.3%

    2020                                       1.4%

    2021                                       4.7%

    2022                                       9.0?

    From February 2020 through February 2021, the overall inflation rate has been 7.9%.  Inflation is felt across our economy, starting at the supermarket as food prices have gone up by 8.6%.

    These days, pulling up to the gas pump is somewhat of an adventure and a major topic of conversation.  The cost of gasoline has gone up 38% since last February 2021.  There are significant ripple effects of these gas prices, as over 70% of our goods and services are trucked across the country. 

    Have you recently taken a cab ride from one of the airports?  Drivers from yellow cabs, Uber, and Lyft for the most part, use their own money to gas up their vehicles.  There are not enough vehicle charging stations (yet) available for cabs currently, so they must rely on gas-powered vehicles.  In order to earn a living, they must pass on the majority of their gas price increases to their ridership!

    As of this writing, California has the most expensive gas in the country.  Their average cost is $5.57 per gallon, the only state with an average cost of over $5.  More than one friend of mine texted me a photo of a Shell station in Los Angeles charging $6.99 per gallon of regular gas!  The states with the least expensive gas are Kansas and Oklahoma, both averaging $3.79 a gallon. 

    Unless the “Keystone Pipeline” project gets reawakened, I don’t see this issue subsiding anytime soon.  Windmill power is being developed and many years away, so me must reply on gas.  Gas prices can vary as much as 10-15 cents a gallon even a few blocks or miles away.  The savings add up over time!

    Heed My 7 Tips to Save Money at the Gas Pump:

    1. Wholesale Clubs: Members of wholesale clubs such as Costco, Sam’s Club and Krogers receive member discounts on gas!
    2. Pay with Cash:  There is a saying, “Cash is King!”  You can usually save between 5-10 cents a gallon when you pay in cash.  If you have a big truck or SUV, this adds up quickly.
    3. Loyalty Programs and Gas Cards: Nearly all gas stations have some type of loyalty program.  Most of us are creatures of habit and fill up at the same station or two.  Sign up at the stations you most often frequent or consider changing stations.
    4. Investigate Your Credit Card Rewards: Check to see if your credit card company has any deals on gas purchases, even if only in the short term.
    5. Time it Just Right: According to GasBuddy, the best day to save at the pump is Monday, the day that has the lowest gas prices in most of the country.  Do NOT fill up if you see the gas delivery truck leaving the station!  There are air bubbles that can temporarily negatively affect the gas quality until they have time to settle.
    6. Smart Phone Apps:  Downloading apps, such as GasBuddy, Gas Guru and the AAA mobile app, can be helpful, especially when traveling.  Also consider downloading CityMapper (a fluorescent green icon) which gives you the time it takes to get to your desired location by train, bus, citi bike or walking and it shows the estimated calories you will burn by doing so.
    7. Check the Internet:  Before embarking on a road trip, you can check in advance online where the cheapest gas is.  For example, www.NY1.com/gas is one site you can check in advance of road travel.

    Spring is officially here this Sunday and there will be more cars on the road.  The bottom line is, a little bit of reconnaissance can save lots of $$$$!  Let me know how it goes at Rob@InsuranceDoctor.us.

  • Inflation & Pizza

    Inflation & Pizza

    You will be hearing about inflation frequently during this holiday season.  The current administration forecasted a 2% inflation rate.  The Consumer Price Index numbers were just released, and from October 2020 to October 2021 the inflation rate was 6.2%!  This is the highest increase in the last 30 years!

    My friend Jay (originally from New Jersey) was in town from Maryland this weekend, and his favorite pizza is from New Park, so we had to go last Sunday before heading to Madison Square Garden for the Rangers vs. Devils game.  We were 3rd in line after 2 gentlemen who looked like they were in their late 60’s.  When the first man’s pie order came out, he asked, “how much do I owe you?”  The worker said $27 to the surprise of the man.  I said, “inflation just kicked in right now” and all 3 of us laughed. 

    Since the early 1960s, the price of a regular New York slice has almost matched the price of a subway token.  This was called the “Pizza Principle” or the “Pizza-Subway Connection!” 

    From New Park, I needed gas and paid over $4 per gallon for 91-octane on a credit card.  I have seen gas in Manhattan for $5 per gallon.  As per the Automobile Association of America, the national price of regular gas is currently $3.41 per gallon.  The New York State average is $3.56 per gallon.  The Manhattan average price is $4.33 per gallon. 

    This got me thinking about what has caused this inflation to be running rampant!  Basic economic supply and demand are what triggers inflation.  There are root causes for what is going on right now and we must adjust our budgets to cover these higher costs.

    The reasons include, but are not limited to:

    1. Government Covid Relief Bill: This bill disincentivized some people from returning to work. Now employers are seeking workers and paying higher salaries to hire them.  Increased wages cause inflation.
    2. Supply Chain Shortages and Delays:  The majority of US goods are trucked from coast to coast.  There is a shortage across of 80,000 truckers across America.  Long-haul truckers have gotten a raw deal over the years as working conditions have deteriorated.  According to the U.S. Bureau of Labor, the median trucker salary is only $47,000 per year, and adjusted for inflation, their purchasing power is down 30% from 1970-2020.
    3. Increased Costs of Raw Materials:  A combination of factors including increased gas and transportation costs and food shortages have driven up prices.  Your favorite Queens Pizzerias are paying more for tomatoes, cheese, basil, olive oil and cardboard boxes.  Some of these prices increases have been passed on to the consumer.
    4. Corporate America: When the pandemic first hit in 2020, corporations such as the airlines and automakers, went into survival mode and cancelled semiconductor orders, furloughed workers and slowed down production, which created supply shortages.  As the public had more disposable income, the demand increased faster than the bounce back in supply.  Unfortunately, this is not going away anytime soon.

    In summary, this will really impact Americans this Thanksgiving and Holiday Season.  This is a good time to adjust budgets and control spending, as your dollar will not go as far as it used to.