How Inflation Erodes Savings
Inflation steadily reduces the purchasing power of cash and low-interest savings. At 2% inflation, money halves in value in 35 years. Real returns matter: subtract inflation from interest to see actual gains. To protect wealth, keep only a small emergency fund in savings; invest the rest in real assets like stocks or property. Avoid holding large amounts of cash, as it loses value and earns no interest. Review accounts yearly and adjust for inflation in contracts and salary negotiations.
