Inflation
The rate at which prices increase over time, reducing the purchasing power of money.
At 3% annual inflation, something costing $100 today costs $134 in 10 years and $181 in 20 years. This is why saving money in a 0.5% savings account actually loses purchasing power — your dollars grow at 0.5% while prices grow at 3%, meaning you fall behind by 2.5% per year. Investments need to outpace inflation to build real wealth.
Try it yourself:
Open Inflation Calculator →