What Is Inflation And How Does It Directly Impact You?
VIDEO TRANSCRIPTION – Exactly, what is inflation and how does it directly impact you? Hi, I’m Steven D. Cooper, also known as Coach Coop, your tax strategist with Coopers Accounting Service, because your financial freedom matters.
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As we are living in this current society right now, we know that inflation is impacting you. What is inflation? Is a general increase in prices for goods or services over time, which reduces your own purchasing power.
I want to bring in another economic term called externality. Externality is something that has an unintended cost or benefit imposed on you. A great simple example.Your neighbor is having a party and is blasting the music and you need to go to sleep.
That is one great definition of externality. Let’s hit home with this right now. This Iran war has diminished some of your purchasing power. How is that? You notice that gas is going up. I saw gas in Southern California, $8.05. I seen people that go to the pump.
And they only have 5 10 15, sometimes 25 dollars worth of gas. I’m asking myself, 5 dollars? Man, they don’t even pay for a gallon of gas now. That’s how tough it is for certain people out there.
Another definition of the word inflation is hidden tax. What does that mean? That means it is the tax that you got to bear or the burden to you. That hurts us. So let’s look at a classic example. Beginning of 2026.
Your purchasing power and compare it to now, you could have bought more goods and services beginning of the year than what you can currently buy now. That is where the hidden tax comes in at. Now, some of you that are W-2 or one income
That puts a lot of pressure on you because you never prepare for this. for business owners, depending on what you do for a living, you have the ability to go out and make additional money or additional income. But for my W-2 brothers and sisters, maybe a little bit challenging as a result of this.
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