Inflation
The rise in prices that shrinks what cash buys.
Inflation is the general rise in prices over time. As prices rise, each dollar buys a little less.
Why investors care
Money that sits still quietly loses value. Investing is, in part, how you keep your savings ahead of rising prices.
In the US, inflation is most often measured by the Consumer Price Index (CPI).
ExampleAt 3% inflation, $100 today buys only about $74 worth of today's goods in 10 years.