Inflation. Pick up any news, western countries, Asian countries, or India

And you will get to know that inflation is rising everywhere,

So the question arises that why is it rising?

and what is the government doing to stop it?

and also a basic question like what inflation actually is?

so we will try to understand all this in simple words.

when the prices of things start to increase, then it is called Inflation.

Now if the price of a certain thing is 100, then it becomes 110 the next year and 121 on the next,

then the inflation is 10%

Now this 10% inflation means that the product is getting costlier,

If you think the other way,

Early, you would have got the product in 100 rupees only,

but the next year, the shopkeeper would demand another 10 rupee note,

and 21 rupees, which means your 100 rupees value is going down.

and we should take at inflation like this, you would get to know about this later in the article,

The next question arises that why inflation rises?

to try to focus then you will understand,

The product that you were going to buy, must have been produced somewhere too,

so if it becomes costlier for them, then they will sell it to you for more,

this is called cost-push inflation,

that it is expensive for you because it's cost increased,

Another cause can be that you were the only one to buy that at a time,

so the shopkeeper gave it to you at the price you wanted.

but the next time, 4 more people were there,

then the shopkeeper thought that the product is only one but there are 4 customers,

so he made it, even more, costlier and now you would have to buy it at that cost.

This is called demand-pull inflation,

Another cause can be that the supply of something stops suddenly,

like if that product was available in that area so it was cheaper,

If inflation happens due to this then it is called supply shock.

another thing is Built-in inflation.

This is a confusing process, I will tell you,

if prices go up every year then you will ask for a higher salary,

and now when your salary will increase then you will buy more,

and then the prices will go up more.

then you will go to your boss again and ask to increase your salary,

as the things are costlier now,

so this cycle is called Built-inflation,

And you would have simply understood one thing that

if this cycle is going on then inflation is not going anywhere,

its rate may be less or more, but inflation remains always,

if you look at the graph, you will see that it becomes even 12% sometimes,

and again it is increasing with a steep curve,

and as I told you in the starting to remember,

Inflation means the decreasing value of your money,

so if you want to beat inflation with your money,

then that means that your money must grow faster than the rate of inflation,

there are many ways of doing that and people do whichever they like,

some invest in the Stock market,

This is not a financial advisory article, but an educational one,

and the Stock market has its own risks and rewards,

And everybody has a different risk appetite, hence you must research accordingly.

But diversification is important for investing in the stock market,

People say that one should invest in different industries,

and in different companies,

but one thing which is difficult to do, hence fewer people advice to this,

that one should invest in different country's companies'

If you look at the US, then all the big technology companies have resided there,

and the stock's return is also high there,

but it is difficult to buy US's stocks from India,

And this was difficult but now it is made easy by the INDmoney app,

money is semi-regulated,

and it is used bishop money which is certified by Microsoft etc,

And you can open a US trading account from India in 2 minutes for free,

and there is no commission charged for any buying or selling of the stock,

money is capable of doing this because they have done a partnership with drive wealth.

so drive wealth will be managing your US trading account.

you have to simply download the app first,

The UI and interface of the app is very clean,

You will have to connect your bank account with the app to transfer your money to drive wealth,

Some banks are linked online and some are offline. Some take 3 days and some a week,

It will depend upon your bank,

After doing this you can buy or sell US's any stock and it will not charge any commission,

and drive wealth is regulated by one of US's authorities,

and you can buy a stock with any minimum money,

In India, you have to buy at least one stock,

But in the US you can even buy a fractional stock,

hence you can also do this here,

So go to the link in the description and pinned comment, go and test the app,

And if you like the platform then you can invest your money through this also,

Now let's go forward in our article,

now there would be 2 questions arising in your mind,

First that how do the government track the price rise,

how do they know that inflation is rising?

as they do not note the price of the various products,

and second that why it is happening nowadays?

why is inflation rising?

let's address the first question,

CPI (Consumer price index) and WPI (Wholesale price index)

these are the 2 ways by which the government tracks the prices,

they have grouped several products in the CPI and look how their prices are changing,

there is no problem if it is between 2-6%

but RBI has breached this 6% in June

On the other hand, the WPI was 12.94% in May,

which was the highest till date,

and you can even this by looking at this graph,

now I will try to address the 2nd question,

Do you remember I told you about the cost-push and demand-pull inflation?

now it would be helpful here,

The first reason is that the prices are going up due to the fuel prices,

this is called cost-push inflation,

Every product comes to you through vehicles, and vehicles require fuel,

and this fuel is used very much,

that's why your product's price is linked to the fuel price,

and hence there cost increases when the fuel prices increase,

And the fuel prices have been increased by 30%

you can watch our different articles on how the fuel prices are decided,

but the 30% incremation increased the cost, and that's why the prices are increased,

second is pent up demand,

people were not buying certain things due to the lockdown

as people are in the pajamas in-home, hence they didn't buy the jeans,

and now people will also need cars to go out,

and their demand will increase suddenly hence their prices will increase,

The third is losses,

now the businesses were closed for a very long time,

and now when they will come again in business, then they will have to sustain their losses,

and to sustain the rents which they have paid,

they will have to increase the prices of their products,

Fourth is low base prices,

last year the companies were giving big discounts,

like the hotel's and air ticket's prices were very low,

but now they are coming to their normal rates,

you will think that there is a 100 or 200% increment if you compare it with the last year,

but they are actually coming back to the normal rates in some industries,

but we can see a spike as their rates were very low during the lockdown,

and that's why inflation is seen like this too in some industries,

Now the question is that what the government and RBI can do to control this?

RBI can actually change the interest rates,

whenever there is inflation the RBI wants that people should spend less money,

and they change the interest rates accordingly so that people should save more,

Government can change the taxes,

India applies the highest tax on fuel in which both the central and state government has shares,

they can change that and give some relief,

the question is that what you should do?

you can like and share the article and install INDmoney by the below-given link,

and check it once,

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