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Understanding Inflation and Protecting Your Savings

Inflation silently destroys cash savings. Learn which assets protect against it and how to ensure your money grows in real terms.

By FlowFund TeamJune 28, 20263 min read

What Inflation Does to Your Money

4% annual inflation: $10,000 in a 2% savings account loses purchasing power each year. In 10 years your $10,000 only buys what $6,756 buys today.

Assets That Beat Inflation

Stocks: Over any 20-year US period, stocks beat inflation.
Real estate: Property values and rents rise with inflation.
TIPS: Treasury Inflation-Protected Securities adjust principal with inflation.
I-Bonds: US savings bonds with inflation-linked rate, $10,000/year limit.
Gold: Traditional hedge, highly volatile.

What to Avoid

Long-duration bonds lose value when rates rise. Cash loses purchasing power. Fixed-rate savings below inflation are net losses.

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