SOURCE: Chapwood Investments

Chapwood Investments

August 15, 2012 09:00 ET

Nationally Recognized Wealth Manager Ed Butowsky Sees Misleading Consumer Price Index (CPI) as a Core Catalyst for Increasing Overreliance on Government Entitlement Programs

Second Quarter "Chapwood Index" Results Continue to Support Notion That the Highly Manipulated CPI Is an Inaccurate Measure of Cost of Living Increases, Leading to Devastating Outcomes for Investors

DALLAS, TX--(Marketwire - Aug 15, 2012) -  Chapwood Investments is pleased to release the second quarter results of the Chapwood Index (www.ChapwoodIndex.com), a real cost of living index that attempts to show, on a quarterly basis, a more accurate figure for cost of living increases in the nation's top 50 major metropolitan areas.

"For many of us in the financial services industry, the results of the Chapwood Index confirm what we have suspected for nearly three decades -- the CPI is no longer an accurate indicator of the true cost of living increases for Americans," states Ed Butowsky, Founder of the Chapwood Index. "The unfortunate and devastating result is that many investors have been relying on this faulty statistic for so long that they have been steadily falling behind, struggling to have the money to pay for everyday expenses, let alone saving for their futures. The unintended consequence of all of this is an extreme overreliance on government entitlement programs. It's a vicious cycle where everyone loses."

Butowsky's goal, through the Chapwood Index, is to change that cycle -- educate consumers by providing them with a more accurate picture of how much their true cost of living rises on a quarterly basis. From this knowledge comes the power for consumers to change the way that they spend, save and plan for their futures. From that change should come a gradual, organic decrease in the reliance on government entitlement programs.

"The CPI tallies the cost increase for thousands of goods and services, most of which are not used by the average consumer on any given day," says Mr. Butowsky. "What we have done is narrow that list down to the 500 most widely used goods and services, tracking fluctuations in those prices to more accurately reflect what consumers are spending in their day-to-day lives.

Another goal of mine is to help my colleagues, financial advisors and planners, better serve their clients by garnering a truer picture of what their individual cost of living increase is. We, as financial professionals, have a responsibility to help consumers better understand how even minimal increases in the cost of everyday items -- goods, services, taxes, etc. -- affect their overall financial health. By doing so, we can begin to take away the governments crutch and give our clients the power to lead healthy, financially independent lives."

Mr. Butowsky developed the Chapwood Index because he felt that the CPI was not an accurate reflection of the true cost of living increases, nor did it reflect any changes in purchasing power for consumers. "I am tired of observing people committing financial suicide by using a flawed statistic that is universally known to be inaccurate as a benchmark for maintaining a constant standard of living," states Butowsky. For 2011, the Chapwood Index revealed that the yearly combined national average increase for the top 50 U.S. cities was 9.9% for the period from January through December 2011; more than triple the rate of the Bureau of Labor statistics CPI published. "It is about time someone does something about this tragedy and stands up to explain why people are falling behind each year, most notably lower and middle class Americans."

In addition to viewing quarterly results for the Chapwood Index at www.ChapwoodIndex.com, site visitors can also participate in an online poll. Chapwood's latest poll found that during Q1 2012, 94% of consumers felt that their personal cost of living was much higher than the published CPI figures. 

This quarter, site visitors can weigh in on another important question: How do you feel the results of the upcoming election might effect your personal cost of living over the next four years?"

Index Methodology:
In creating the Chapwood Index, Chapwood's research team compiled a list of over 4,000 items from consumers around the country of products and services that they spend money on in the daily course of their lives. That list was narrowed down to the top 500 items that were used most frequently. Over a 2-year period, fluctuations in the true price for each of those items was carefully tracked and monitored without any manipulation or biases, quarter-by-quarter and city-by-city, creating a weighted index based on price. Examples of items included in the Index: Starbucks coffee, Advil, gasoline, taxes, tolls, fast food restaurants, computer paper, toothpaste, oil changes, car washes, pizza, internet service, Gymboree lessons, mobile phone service, cable TV, dry cleaning, movie tickets, toothpaste, hairspray, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, underwear and People magazine.

Mr. Butowsky went one step further to create the Chapwood Forecaster (www.chapwoodforecaster.com), which allows consumers to input their personal information, utilizing the Chapwood Index for their city, to determine a realistic financial plan.

For more information on the Chapwood Index, or to speak with Ed Butowsky, please contact Sarah Heatley at sarah@chapwoodinvestments.com or 972-865-2225.

About Ed Butowsky
Ed Butowsky, managing partner of Chapwood Investments, is an internationally recognized expert in the investment wealth management industry with 25 years of experience. Through his work with professional athletes, Butowsky was recently featured in the Sports Illustrated article, "How (and Why) Athletes Go Broke" as well as the upcoming ESPN movie on athlete finances, "Broke." Butowsky is a frequent guest on CNN, ABC, CBS, NBC, Fox Business News, FOX News Channel, and Bloomberg TV. Ed is also regularly heard on radio shows around the country, discussing wealth management, economics and other subjects that are of interest and timely related to the finance/investments world.

The Top 50 US Cities and their Chapwood Index Cost of Living Increase - Q1 2012 - Q2 2012

City   Q1-12   Q2-12   Q2 YTD
1. New York, NY   3.3%   3.1%   6.4%
2. Los Angeles, CA   3.6%   2.6%   6.2%
3. Chicago, IL   4.1%   3.4%   7.5%
4. Houston, TX   2.7%   3.0%   5.7%
5. Philadelphia, PA   3.4%   4.0%   7.4%
6. Phoenix, AZ   2.9%   1.6%   4.5%
7. San Antonio, TX   2.7%   3.2%   5.9%
8. San Diego, CA   3.5%   2.9%   6.4%
9. Dallas, TX   2.3%   2.9%   5.2%
10. San Jose, CA   4.1%   3.1%   7.2%
11. Jacksonville, FL   2.2%   2.4%   4.6%
12. Indianapolis, IN   2.9%   4.1%   7.0%
13. San Francisco, CA   4.2%   3.0%   7.2%
14. Austin, TX   2.7%   3.1%   5.8%
15. Columbus, OH   3.3%   3.1%   6.4%
16. Fort Worth, TX   2.9%   2.8%   5.7%
17. Charlotte, NC   1.9%   2.2%   4.1%
18. Detroit, MI   2.8%   4.1%   6.9%
19. El Paso, TX   1.9%   1.7%   3.6%
20. Memphis, TN   2.6%   2.7%   5.3%
21. Baltimore, MD   3.0%   3.2%   6.2%
22. Boston, MA   3.1%   4.4%   7.5%
23. Seattle, WA   2.9%   3.2%   6.1%
24. Washington, DC   2.7%   2.1%   4.8%
25. Nashville-Davidson, TN   2.8%   2.2%   5.0%
26. Denver, CO   2.4%   3.3%   5.7%
27. Louisville, KY   2.7%   1.7%   4.4%
28. Milwaukee, WI   3.3%   3.0%   6.3%
29. Portland, OR   2.9%   2.4%   5.3%
30. Las Vegas, NV   3.2%   2.8%   6.0%
31. Oklahoma City, OK   2.1%   3.3%   5.4%
32. Albuquerque, NM   2.8%   1.6%   4.4%
33. Tucson, AZ   2.8%   2.1%   4.9%
34. Fresno, CA   4.3%   4.0%   8.3%
35. Sacramento, CA   4.2%   3.6%   7.8%
36. Long Beach, CA   4.0%   3.1%   7.1%
37. Kansas City, MO   2.8%   2.1%   4.9%
38. Mesa, AZ   2.4%   2.4%   4.8%
39. Virginia Beach, VA   3.4%   2.9%   6.3%
40. Atlanta, GA   3.1%   3.5%   6.6%
41. Colorado Springs, CO   2.8%   2.7%   5.5%
42. Omaha, NE   2.6%   2.0%   4.6%
43. Raleigh, NC   2.7%   3.2%   5.9%
44. Miami, FL   3.2%   2.5%   5.7%
45. Cleveland, OH   4.1%   3.7%   7.8%
46. Tulsa, OK   3.1%   2.2%   5.3%
47. Oakland, CA   3.9%   4.4%   8.3%
48. Minneapolis, MN   2.9%   1.8%   4.7%
49. Wichita, KS   2.3%   1.4%   3.7%
50. Arlington, TX   2.5%   2.6%   5.1%

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