Why You Should Worry About Inflation

Why should you worried about inflation, its actually one of the scariest things when it comes to money. Because it doesn’t matter how good you are at saving money, because your constantly going to be losing money.

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1. What is inflation?

– Inflation is when your money loses purchasing power, in a way it loses value
– Why? Because usually, the government goes out their and prints more money, which them makes your money worth less ( because prices go up to adjust for inflation )
– Which means you cant buy the same things with the same amount of money anymore

For example:
– During the late 1800s and early 1900s, the us currency was backed by gold, meaning that govement promisised to redeem whatever paper money you had for a certain amount of gold
– As you guys know gold is precius metal, and its hard to find, to its valuable, and the government cant just go and find more minds when they want to
– So 10k back them could buy me 4 house in Brooklyn new York

But don’t get to happy:
– Because the average salary was $16 a week and people use to work back then around 12-16 hours a day
– This matter because: your savings are going to be eradicated in the long term.

2. Why Does inflation Happen and Why the government Print money?

– The truth is that inflation I lesser evil, what you don’t want is depression in the economy, which is what happens when people lose faith and stop spending money
– Which then leads to business not having revenue, and laying people off and its starts a chain reaction of problems
– So the government knows that more in the economy is going to devalue the dollar, but its also going to promote spending, and its also going to promote employment

Simple economics on why inflation happens:
-nInitially when you first print the money ( you buy everything at the regular price )
– However as time goes on and demand increase, well the economy has to meet that demand, and in order to do so, they might raise prices, and because there is more money in the economy people can afford it
– But wages should also adjust

Another example is:
– When a business is force to raise minimum wage ( their cost goes up )
– So prices go up to average it out
– And boom also inflation

3. How to protect yourself
– Your money has to make more money than the inflation rate
– So if inflation is 4-5% annual now ( example not real numbers)
– But you make 10-12% on your money then you should not worry

Ontop of that: long term inflation is problem but short term you’ll be okay
– The money only money saved you need is
– Money for emergencies 3-6 months
– And money for down payments on a home
– But the rest of he money should be invested

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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