The Truth About Inflation: Why the 2% Number is a Lie (And What You Can Do About It)
You’ve probably heard that inflation is “under control” and hovering around 2%. It’s what the government reports. It’s what financial news outlets parrot. And it’s what your financial advisor might be using in your retirement projections.
But here’s the truth…
That number is a lie.
Inflation isn’t just about numbers on a spreadsheet. It’s about the real cost of living the money leaving your wallet when you fill up your gas tank, buy groceries, or pay your mortgage. And if you’ve been feeling like your dollar doesn’t stretch like it used to, you’re not crazy. You’re paying the real inflation rate, not the fantasy the government is feeding us.
Let me show you what I mean.
ShadowStats: The Data the Government Doesn’t Want You to See
There’s a site called ShadowStats.com that compares the current government-reported inflation rate with how it used to be calculated back in the 1980s before all the adjustments, substitutions, and “hedonic” tweaks.
The creator of the site is an economist who worked with airlines to track true costs in the ‘70s and ‘80s. When the numbers stopped making sense in the 1980s, he realized something was off.
What he found was stunning: the real inflation rate may be closer to 8–10%, not 2–3%.
That’s a massive difference and it has huge implications for your money.
How the Government Manipulates Inflation (Yes, Really)
Back in the day, inflation was calculated by comparing the price of the same item year over year steak to steak, gas to gas, house to house. Then came the substitutions.
Say steak gets too expensive. The government assumes you’ll switch to hamburger. So instead of measuring steak-to-steak inflation, they now compare steak-to-hamburger. That artificially flattens the number.
Pretty clever, right?
The official Consumer Price Index (CPI) has changed so much that comparing it to the original 1980 formula reveals just how far off today’s numbers really are. And the further we get from the truth, the more damage it does to you especially when your retirement plan is built on faulty assumptions.
Why This Matters to Your Retirement Plan
Let’s say your financial advisor uses a “safe” 8% return on your investments and plugs in 2% inflation. On paper, it looks like you’ll retire with millions and be just fine.
But if the real inflation rate is closer to 8%, then your real return is ZERO. You’re not growing. You’re treading water. Or worse you’re drowning slowly and don’t even know it.
I ran the numbers using a basic compound interest calculator. Even a 1–2% increase in assumed inflation slashes your future buying power dramatically. At 5% inflation, a retirement fund you thought would give you $50,000 per year might only give you the equivalent of $20,000 in today’s dollars.
Imagine saving for 30 years and ending up broke because the numbers were rigged from the beginning.
What Financial Advisors Won’t Tell You
When I was a traditional financial advisor, I’ll admit it I used those same “safe” inflation assumptions. Why? Because they made the numbers look better. They kept clients calm.
And they helped close deals.
But I eventually couldn’t live with that. It wasn’t honest. And it wasn’t helping people truly prepare for the future. That’s part of why I left the financial advising industry and started Money Ripples.
Now, I’m on a mission to help families like yours become financially independent with real passive income that grows faster than inflation.
Why Passive Income is Your Only Real Defense
Here’s the bottom line: You cannot save your way to wealth when inflation is eroding your dollar.
You need investments that pay you now, not 30 years from now. You need passive income strategies that beat inflation in real time not just theoretical stock market returns that don’t keep pace with the cost of living.
That’s why I teach things like:
- Investing in cash-flowing real estate
- Using infinite banking to grow money tax-free
- Leveraging private lending and alternative investments
- Getting your money out of Wall Street and into your control
If inflation is going to keep climbing and let’s face it, it probably will then you need assets that climb faster.
The Fed’s Money Supply Proves Inflation Isn’t Going Away
Want more proof? Look at the M2 money supply chart from the Federal Reserve. It’s gone parabolic since 2020 and despite claims of tightening, we’re seeing money printing ramp up again.
That means more dollars chasing fewer goods.
Translation? More inflation.
So don’t buy the narrative that everything’s fine. Watch what they do, not what they say.
The Bottom Line
You can’t afford to trust the 2% inflation myth. Your financial future depends on recognizing the truth and taking action now.
Ask yourself:
- Is your retirement plan using realistic inflation numbers?
- Are you relying on mutual funds to grow faster than the real inflation rate?
- Do you have enough passive income to cover your lifestyle without working?
If the answer is no, it’s time to rethink your strategy.
Inflation is real. The government’s numbers aren’t. You deserve better.