Not Financial Advice: What cost $25000 in 1905? It would cost $665101.49 in 2015. Also, if you were to buy exactly the same products in 2015 and 1905, they would cost you $25000 and $963.48 respectively.
Inflation is a sustained increase in the general level of prices for goods and services. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
It is a sign that an economy is growing. In some situations, little inflation (or even deflation) can be just as bad as high inflation. The lack of inflation may be an indication that the economy is weakening.
Tip! Inflation is a pernicious beast. It eats away at the value of many assets likestocks , leaving many poorer in the process. In the 1970s, the S&P 500 rose less than 20% in value. Check out some ways income investors can protect against inflation at Nasdaq.com.