Understanding Inflation's Impact On Wealth Growth

Cash is only king until it isn't. Seeing $200,000 sitting in your savings account feels secure... until you realize inflation is chewing through 3-4% of that every year. If your income is 150k, here's the real danger: keeping "just incase" cash at ultra low yields makes you a long-term loser. Why cash isn't enough: Opportunity cost That money could be earning at least 4% to keep up with inflation in a HYSA False Cushion Emergency fund = 3-6 months of expenses. Even that should be in a HYSA!! Psychological trap "I'll invest once I have $250k in cash." Meanwhile, you watch as inflation and missed market returns destroy real purchasing power. So, what should you do with excess cash? Build a buffer, then allocate. Keep 3-6 months of expenses in a high yield account. Everything above that? Direct it to your investment vehicle of choice. (401k, Roth, taxable, or HSA) Automate the flow. Let your checking account funnel excess monthly to your brokerage account or Roth IRA. You'll never need to "remember" to invest again. Set clear goals for the rest. Are you saving for a down payment, private school tuition, something else? Label your buckets and choose the right vehicle. If you want your wealth to grow, you need to put your money to work intelligently.

Is Inflation Eating Your Savings for Breakfast? Let’s face it—watching your money lose value while sitting in a savings account or fixed-income investments is frustrating. Inflation isn’t just a buzzword; it’s a silent thief stealing your purchasing power every year. Here’s the reality: Traditional investments aren’t keeping up. • Cash Savings: Inflation quietly erodes your dollars over time. • Bonds: Fixed returns fail to match rising prices. The Solution? Real estate, particularly multifamily properties, offers a hedge against inflation by growing your income and wealth over time. Here’s how: • Rising Rents: Rental income typically grows with inflation, keeping pace with rising costs. • Property Appreciation: As inflation rises, so does the value of real estate assets. • Tax Advantages: Depreciation and interest deductions help protect and grow your returns. Let’s break it down: Imagine a $50 rent increase across 150 units, adding $90,000 to the property’s NOI annually. At a 6% cap rate, that’s a $1.5M value increase—and that’s just one way multifamily real estate fights inflation. Now imagine rents rising with inflation over 5+ years—your wealth grows while inflation works in your favor. Why settle for watching inflation win when you can put your money to work instead? What’s your plan to beat inflation? Real estate can be the answer.

Inflation is the silent killer of investment returns.  Many focus on nominal returns (the percentage gain before inflation), but it’s the real return (after subtracting inflation) that matters.  For example, a 5% return with 3% inflation leaves you with only 2% real growth—your purchasing power barely increases. Buy-and-hold investors often overlook this, as Wall Street rarely factors inflation into its rosy projections.  Whether you’re swing trading or trend following, always view your gains through the lens of inflation to protect your wealth and purchasing power.