Inflation — Your Savings Are Shrinking Every Day
If inflation is 3% per year, your money loses 3% of its purchasing power annually. That coffee that costs $5 today will cost $6.72 in 10 years and $9.03 in 20 years.
Real Cost of Keeping Cash
| Today | 10 Years (3%) | 20 Years (3%) | 30 Years (3%) |
|---|---|---|---|
| $100,000 | Buys $74,409 | Buys $55,368 | Buys $41,199 |
| $500,000 | Buys $372,045 | Buys $276,840 | Buys $205,995 |
$500,000 in a zero-interest account loses $294,000 in purchasing power over 30 years. That is more than half!
How to Beat Inflation
Your investments must earn MORE than inflation. Savings account at 0.5% = losing money. Stocks at 10% = beating inflation by 7%. Even bonds at 4-5% barely keep pace.
The only way to maintain and grow wealth long-term is to invest in assets that outpace inflation.