The value of consumers' savings is falling at the fastest rate in 40 years because of inflation
The Consumer Price Index, which measures inflation for a basket of goods and services, rose 8.6% in May from a year earlier.
That's the fastest rate since December 1981. Prices for gas, food, and housing are mostly to blame
The so-called "rule of 72" is a simple way to figure out how it will affect things in the long run
This regulation applies to investment returns. It's a rough estimate of how long it will take to double money at a specific pace
The rate at which increasing prices would halve the value of consumers' savings is approximable
If people used this formula, their money would be worth half as much in about 8 to 8 12 years. (If you divide 72 by 8.6, you get 8.37.)
Wage growth and any interest earned on savings also help to make up for at least some of the effects of inflation.
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