Today’s topic is Inflation and how it affects your financial goals. Inflation is represented by the Consumer Price Index (CPI) which measures current and past prices of a sample “market basket” of goods from several categories such as housing, food, transportation and clothing and other discretionary and non-discretionary goods.
Inflation (rising prices) affects the cost of living, cost of doing business, borrowing money, mortgages, health care costs, etc. Inflation makes $1 next year worth less than $1 today because the $1 will buy fewer goods a year from now. If annual inflation is 2%, then $1 today is worth $.98 a year from now.
So how can inflation be any good for anyone? It depends. Watch to learn more.