Definition
A broad increase in prices that reduces money's purchasing power.
Why it’s relevant today
Inflation data continues to shape rates, wages, and market expectations.
Why it matters
Investments must outpace inflation to grow real wealth.
3 months ago
Inflation
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Inflation is one word I feel everyone who is working should understand. Growing up I was taught to keep cash available and investing/saving was not talked about. Throughout adulthood I saw prices go up much faster than my income was going even though I was getting raises. This created financial pressure I hadn't accounted for because the value of the dollar wasn't taking me as far as it use to. Getting over this mentality was a challenge that I think many people have especially as a first gen.
I hear you. Fortunately, it’s a knowledge gap, one that would help out first gen students the quicker they learn that. Prices only continue to go up, whether it be cars, going to the clinics, groceries, etc. If prices are going up in the range of 2-4% per year, you’re doing financial damage only putting money in a high yield savings paying less than inflation! Yes, your account will get interest but you’re not even breaking even with inflation. So that’s a very risky move. Less risky would be putting it into the market and having a very long term view (20yrs+). We need to reframe the market as risky and bonds and high yield account as “safe”. It’s simply not true!