Purchasing Power Calculator

Purchasing power is the quantity of goods or services that a unit of money can buy. As prices rise due to inflation, each dollar buys less — meaning your purchasing power decreases over time.

At 3% inflation, $100 loses about half its purchasing power in 24 years. At 5% inflation, it takes only about 14 years. The rate of erosion accelerates with higher inflation.

Invest in assets that historically outpace inflation: stocks (average ~10% annual return), real estate, Treasury Inflation-Protected Securities (TIPS), and commodities. Avoid holding excess cash long-term.