Simulation Parameters
Simulation Results
Nominal Value
Real Value
Loss of Purchasing Power
Real Rate
Year-by-Year Breakdown
| Year | Nominal Value | Real Value | Loss of Purchasing Power | Real Rate |
|---|
Beware of Monetary Erosion
Even with a positive return, inflation can erode your purchasing power. A negative real rate means your savings are losing value.
Our Recommendations
- Diversify your investments (REITs, ETFs, real estate...)
- Consider assets with returns higher than inflation
- Regularly reassess your wealth strategy
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Frequently Asked Questions
The real rate is calculated using the Fisher equation:
Real Rate ≈ Nominal Rate - Inflation Rate
For example, with a Savings Account at 3% and inflation at 2%, the real rate is about 1%.
More precisely: (1 + nominal rate) / (1 + inflation rate) - 1
Inflation increases the price of goods and services. If your savings do not yield at least as much as inflation, you will be able to buy less with the same amount.
Example: With 2% inflation, a product costing $100 today will cost $102 in one year. If your savings only yield 1%, you lose 1% of purchasing power.
- Regulated Savings Accounts: Offer similar features to standard savings accounts with government-set interest rates.
- High-Yield Savings Accounts for Low-Income Individuals: Provide higher interest rates and are designed for people with lower incomes.
- Term Deposits: Offer guaranteed returns, but your funds are locked for a fixed period.
- Guaranteed Life Insurance Funds: Low-risk investment options available through life insurance policies.
- Real Estate Investment Trusts (REITs): Provide rental income but carry potential capital risk.
How can I protect my purchasing power?
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