Inflation Is Expensive
Invest to protect your purchasing power.
What This Means
Inflation is the silent enemy of your money—and one of the biggest reasons we invest.
Every year, the dollars sitting in your wallet or bank account buy a little less than they did the year before.
A coffee that cost $3 a few years ago might cost $5 today. Houses that once sold for $60,000 now cost many times that. The same thing happens to groceries, healthcare, travel, and just about everything else.
That’s why holding too much cash isn’t always as “safe” as it feels. While your account balance may not change, your purchasing power does.
If your investments don’t grow faster than inflation over time, you’re effectively falling behind.
Inflation compounds just like investment returns do. At an average inflation rate of roughly 2.5% per year, something that costs $100 today would cost about $165 in 20 years. If you’re spending $6,000 per month today, you may need close to $10,000 per month in 20 years just to maintain the same lifestyle.
Common Questions
Is all inflation bad?
No. A moderate level of inflation is normal and is generally a sign of a healthy economy. It can also help increase the value of assets over time. The problem is when inflation starts rising faster than our income and investments, making it harder to keep up with the cost of living.
How can I protect myself from inflation?
One of the best ways to fight inflation is by owning investments that have the potential to grow over time. While there are no guarantees, staying invested has historically been one of the most effective ways to preserve and increase your purchasing power.
Remember This:
Inflation doesn’t have to reduce your lifestyle. Doing nothing might.