Have you ever wondered why the same things seem to be getting more and more expensive each year?

Well, that's because of inflation! 📈

💡inflation = when the cost of goods and services increases over time 🤓

It's why a dollar today buys less than it did 10, 20, or 50 years ago 📅

For example, a cup of coffee that cost $1 in 1970 would now cost $6.81, a nearly 7X increase! 💀

Even though $1 from 1970 is still $1 today, you can’t buy NEARLY as much stuff with it anymore 😭

So as inflation goes up, the value of everyone's money goes down 💸

It's like a hidden force chipping away at your wealth every year.

The average rate of inflation from 1960 to 2024 is 3.8% per year 🔢

That means the cost of goods and services increased by 3.8% per year on average 🧠

Inflation isn't always bad -- a small amount each year is normal and healthy for an economy 📊

But high or unpredictable inflation can be harmful, eroding the value of your money 💸

Inflation is the reason why keeping your money in a savings account, or keeping cash under your mattress, actually guarantees that your money loses value over time 😔

Meanwhile, investing in stocks is one of the best ways to beat inflation, since stocks have historically grown faster than inflation on average 📈

As an investor, you need to subtract the inflation rate from your returns to understand your "real" return 💰

For example, if your stocks earned 5% but inflation is 3%, your "real" return was only 2% because the real value of your money only grew by 2% 🛒

Inflation is a complex topic, but the key takeaway is this: a dollar today is worth more than a dollar tomorrow. 💰⌛

Next, let's learn more about how inflation affects you and your investments! 📚