What cause inflation

A variety of inflation measures are in use, because there are many different price indices. Inflation is causing your money to become less valuable, if you do nothing about it.

According to this inflation calculator, based on US CPI

• What cost $1000 in 1997 would cost $1309.22 in 2007. Also, if you were to buy exactly the same products in 2007 and 1997, they would cost you $1000 and $785.20 respectively.

How to outstrip inflation

Living below your means Human being is a very flexible creature. When the certain products get more expensive, and it finally hurts our wallet, we will be flexible enough to use less of it. You can either

• buy less of the more expensive stuff, and more of the less expensive stuff. OR
• let your standard of living fall

Invest for better returns

• You just have to get your money to work harder, and get a return that’s higher than inflation rate.