Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. Year after year prices will continue to rise, which in result decrease your purchasing power.  Your money in future will get you less than now.

 

Everyone must now start thinking about if your interest that you earned will be higher than rate of inflation over the same amount of time.  We know if your rate of return is lower than inflation, then your money will not be growing.