Looking to achieve financial independence with new business. Am I accurately calculating inflation? : personalfinance


Good Morning,

I’ve recently quit my job to pursue a business idea that I am hoping will bring me financial independence. I’ve been going to the grocery store each week and measuring the prices of stable household goods and a few additional necessities (not going to say exactly what, because of the business, but I can be more specific if needed). Usually, it is bread, milk, peanut butter, and my proprietary blend of other factors.

I’m measuring the changes in price over time and using that to calculate weekly (sometimes daily) changes in inflation. I then use that inflation information to decide how to invest in the stock market before official inflation estimates come out.

I want to know how exactly the FED measure the basket of goods they use for inflation. Is it national average? Including sales or actual price paid? I’m looking to take my idea public soon and start offering my services and suggestions to customers and want to make sure that I can’t be sued for fraud or incompetence.

My investing based on this information has been profitable in the stock market so far, but I don’t have enough capital to live on investments alone (I have about 10k that has been growing about 40% from the start). That is why I want to open my business up to customers for additional income.

If my system works, then it should be fine right? Just because it might not be an official method of inflation doesn’t change anything in terms of profit? I’ve adjusted my model based on the public inflation figures and they are pretty close. Therefore, my proprietary blend of products and personal measurement shouldn’t run afoul of any insider information or fraud laws because it is my own blend and not exactly the official inflation measurement right?

Thanks in advance for any help.



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