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When it comes to your long-term investment goals, make sure you consider inflation.

From time to time, you may see the news talking about inflation and its impact on our finances. Inflation remains a relevant topic because it can affect our spending power.

Simply put, inflation measures how quickly the price of the things we buy increases over time. For example, candy bars from a vending machine typically cost 50¢ twenty years ago. However, these days, we pay closer to 75¢ (or more!) for a candy bar. This concept applies to most things in life — from the cost of milk at the grocery store, to the interest rates you may pay on your credit cards. As you can see, inflation decreases your buying power over time when prices naturally go up.

The average rate of inflation has been around 3%. So, when it comes to your long-term investment goals, make sure you consider investments that have a chance of keeping up with, or even beating, inflation over time. That way, when you reach your golden years, you can look forward to being able to give your grandchildren a few more candy bars.

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