What is inflation? Here’s why the cost of goods rises and what it means for your investments and savings

What is inflation? Here’s why the cost of goods rises and what it means for your investments and savings

Inflation, an increase in the costs of goods and services, means that your money and its has effectively gone down in value “” because it buys less.







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Inflation is the increase in the prices of goods and services in an economy over time.

While a low, steady inflation rate around 2% annually is desirable, indicating a healthy economy, high or rapidly changing inflation is dangerous.

Inflation lowers the value of cash savings. To hedge against it, invest in stocks, TIPS, or tangible assets like real estate.

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Does it feel like a dollar buys less than it used to? You're not imagining things. "It's inflation," people sigh.

 You probably have a rough idea of what inflation means. The cost of things is going up. 

But what is inflation really, what causes it, and how does it affect your finances? Here's everything you need to know about this everyday economic term.

What is inflation?

Inflation is an increase in the prices of goods and services in an economy over a period of time.

That means you lose buying power “” the