Why We Invest

From Bob French of McLean:

Inflation is a fact of life. A dollar buys less today than when you were a kid, and it will buy even less in the future. There’s no way around it. To maintain your current standard of living in the future, you’ll need to spend more than you do today. We don’t know how much more because the inflation rate is always changing, but we can put it in perspective. Over the 30-year period from 1985 to the end of 2014, the annualized US CPI inflation rate was 2.71% year. That means that a dollar in 1985 is worth a little bit less than 44 cents today. You need to account for inflation when you think about your financial goals.

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