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<p>[QUOTE=&quot;Conder101, post: 1829783, member: 66&quot;]The &quot;official&quot; inflation rate has been running around 3% per year (The real rate is even higher) and the inflation rate compounds so after one year you need to get 3% to stay even after two years you need 6.09%, At three years it reaches 9.2%, four years is 12.55%.&nbsp; Even with 2% inflation after three years you need 6.12% to break even.</p><p><br /></p><p><br /></p><p><br /></p><p>Purchasing power is the most sensible way to determine if you have made or lost money.&nbsp; Say your income doubles while the purchasing value drops by two thirds. You have a LOT more dollars, but you can only buy 2/3rds as much stuff as you could before.&nbsp; So you haven&#039;t made money, you&#039;ve lost even though you have twice as many dollars.&nbsp; Look at it another way, back in the early 80&#039;s inflation was running over 15%, during that time if you got the same salary each year would you say you were staying even because you have the same amount of money?[/QUOTE]</p><p><br /></p>

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