Financial Tools
Free Inflation Calculator
See how inflation erodes the purchasing power of your cash — and what your money will really be worth in the years ahead.
Quick Answer: This free inflation calculator shows how much purchasing power your cash loses over time. Enter an amount, an inflation rate (%) and a number of years — it returns your real purchasing power, the loss in currency and in %, and a chart of the erosion. At 2.5% inflation, cash loses roughly 39% of its value over 20 years. Optional: compare against a hard-asset return you enter yourself (your assumption — not a promise).
Simplified model with a constant rate. Actual inflation and returns fluctuate. The optional hard-asset line is based solely on your own assumption and is not a return promise. Not investment, tax or financial advice.
Why Inflation Is a Silent Tax on Cash
Cash never falls in value on paper. A €50,000 balance still reads €50,000 next year. But what that money buys shrinks every year prices rise. That gap — between the number in your account and the goods it can purchase — is the real cost of holding cash. At a modest 2.5% inflation rate, €50,000 keeps only about €30,500 of purchasing power after 20 years. Nothing was "lost" nominally; it simply eroded, quietly.
This is the core reason I focus on hard assets and dividends — shipping, mining, energy, pipelines and REITs — rather than hoarding cash. Productive assets that generate ongoing cash flow (dividends) give you an income stream that can grow, instead of a balance that silently shrinks. The optional comparison line in the tool above lets you model that idea with your own return assumption. It is deliberately not a forecast: you enter the number, and the chart shows the gap. That gap is the premium for staying invested rather than sitting in cash.
How It Works — 3 Steps
- Enter your amount — the cash sum you want to test, today.
- Set an inflation rate and time horizon — use a base case near 2–2.5% and a higher scenario to stress-test.
- Read the result — real purchasing power remaining, the loss in € and %, and the erosion chart. Optionally tick the hard-asset box and enter your own assumed return to see the gap.
Frequently Asked Questions
What will my money be worth after inflation? It depends on the rate and the horizon. At 2.5% inflation, cash loses roughly 22% of its purchasing power over 10 years and about 39% over 20 years. Enter your amount, an inflation rate and a time horizon above to see the real value that remains.
How does the inflation calculator work? It discounts your nominal amount by a constant annual rate: real value = amount ÷ (1 + inflation)years. The chart plots the eroding purchasing power year by year. It is a simplified model — real-world inflation varies over time.
Does inflation make cash a risky asset? Nominally cash does not fall, but in real terms it shrinks every year inflation is positive. Over long horizons this quiet erosion adds up — which is why many investors hold productive hard assets and dividend-paying stocks instead of large idle cash balances.
Is the hard-asset comparison a return promise? No. The optional line uses only the return rate you enter, clearly labelled as your own assumption. It is not a forecast, guarantee or promise. Nothing on this page is investment advice.
What inflation rate should I use? Central banks in the eurozone and the US target around 2%. Actual inflation has run well above that in recent years. Model a base case near the target and a higher scenario to see how much purchasing power you could lose.
This tool is educational. Nothing here is financial advice. The optional hard-asset comparison reflects your own assumption, not a promise. Always do your own research and consult a licensed advisor before making investment decisions.
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