Inflation and Investing Inflation affects everyone in our economy from the weekly grocery shopper, to the stock market investor. The effect that inflation will have on your financial plans is something you should consider before investing. Inflation to put it simply, is an increase in the price of goods and services. For those who own dollars, inflation is a menace that decreases the value of one's savings. For those who owe money, however, inflation can be kind since the amount you pay back often decreases in value, leaving you money.
Inflation can also play a large role in interest rates.
If the interest rate has been low, then a low prime rate is not as important. Consider this when choosing where to place your savings. Make sure your know the many faces of inflation before you invest. With a direct rollover transfer, your employer sends the amount of your account balance directly to the financial institution of your choice. If you elect an indirect rollover, your employer pays your retirement plan money directly to you, net of 20 percent held for federal income taxes.