Inflation Erosion Calculator
Inflation is the rate at which prices for goods and services increase over time which could effectively reduce the future value of your savings. To see how your savings might be affected, input your current savings below.
This calculator assumes a 0% growth rate on your money.
DisclaimThis calculator is purely for illustration purposes only and does not constitute advice or guarantee amounts.
As we see above, inflation can have quite an impact on your savings. An inflation calculator lets you personalize the results.
Find out how investing with us could help your money grow.
“Inflation destroys savings, impedes planning, and discourages investment. That means less productivity and a lower standard of living.”
By, Kevin Brady
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Future Inflation
Here’s a quick example of what I mean.
Assuming you plan to accumulate RM120,000 (today cost) for your child’s education fund for your child who age 7 years old now. But that number is before inflation!
Suppose you have 10 more years to save? What should the education fund be when your child age 17 years old to equal the RM120,000?
That’s what this calculator will tell you. At 4% inflation, about $177,630. Yikes!!
Most countries’ education inflation rate is higher than the general inflation rate. This means the cost of tertiary education fees rise faster than the average prices of goods and services!
Naturally, you would want your children to study in the best universities.
To help you prepare for your children’s future education, you may contact us to have a customized education plan for you.
How your purchasing power reduction?
Purchasing power means how much your money can buy—its “buying power.” You lose purchasing power when prices go up and gain purchasing power when prices go down. But we can’t talk about purchasing power without also delving into “inflation” which changes the value of a currency over time.
As you know, what a dollar buys today isn’t what a dollar bought 10 years ago. If your salary remains the same but prices rise because of inflation, though, your purchasing power will decrease and you won’t be able to afford to buy as much as you once did.
Rising inflation will erode the purchasing power of your investments. In other words, the amount of money you invested will be worthless when you need to use it.
By, myowlbox.tips
That’s why it’s important to focus on investments that will earn a rate of return that is greater than the value of inflation. When deciding where you intend to invest, take into account such factors as your time horizon and risk tolerance.