How does inflation affect personal wealth?
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It depends on how you’re currently holding your personal wealth.
If it’s sitting in a low-interest bank account, inflation devalues your cash. That’s because the money in your account is devalued every day that the currency inflates.
If it’s in something like stocks or bonds, your wealth might increase, stay the same, or decrease. If the stock market increases in value faster than inflation, your wealth will increase. If it increases at the same rate as inflation, you’ll break even. If it increases slower, you’ll lose money relative to inflation.
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