How Inflation Ate Your Savings: A 30-Year Australian Story

# How Inflation Ate Your Savings: A 30-Year Australian Story From 1990 to 2024, inflation has quietly eroded the purchasing power of Australian dollars by over 150%. This means that $100 in 1990 would need to be $250 today to buy the same goods and services. ## The Silent Thief Inflation is often called the "silent thief" because it slowly but surely reduces the value of your money over time. While a 3% annual inflation rate might seem small, its cumulative effect over decades is enormous. ### Key Statistics: - **1990**: Median house price was $120,000 - **2024**: Median house price is now $800,000+ - **Coffee**: $1.50 in 1990, $5.00+ today - **Petrol**: $0.65/L in 1990, $1.80+/L today ## What This Means for Your Savings If you kept $10,000 in a basic savings account earning 2% interest since 1990, you'd have about $18,000 today. However, due to inflation, that $18,000 has the purchasing power of just $7,200 in 1990 dollars. **You've actually lost 28% of your purchasing power despite earning interest.** ## Protecting Your Wealth The key to protecting your wealth from inflation is investing in assets that historically outpace inflation: 1. **Shares/Stocks**: The ASX 200 has averaged 9.5% annual returns over 30 years 2. **Property**: Australian property has averaged 7.8% growth annually 3. **REITs**: Real Estate Investment Trusts provide inflation-hedged income 4. **Inflation-Indexed Bonds**: Government bonds that adjust with inflation ## Take Action Today Use our **Inflation Calculator** to see exactly how inflation has affected your specific situation. Then consider diversifying your investments to ensure your wealth grows faster than inflation erodes it. Remember: The best time to start investing was yesterday. The second best time is today.