Inflation: The Party Pooper In Financial Planning

When it comes to financial planning, investors often overlook inflation. In reality, even the best-planned financial goals can go awry just because inflation is not factored in at the planning stage. So, how does inflation impact our financial lives? What is inflation? The general understanding is that the continuous rise in the price of commodities, goods and services is called inflation. But actually, it is the other way around. Inflation is not just the price increase of commodities but also the declining value of a currency and, by extension, the declining purchasing power. So, a thing that could be purchased for Rs.100 last year will cost more this year due to inflation. There are several factors that cause inflation, but one of the primary ones is when the government prints new currency and puts it into the economy by spending on infrastructure, rising salaries, etc. The value of...