The Inflation Eraser — What three savers actually owned

The Force

A dollar a day. Fifty years. Two paths. One goes into a piggy bank — the dollars stack, and that's it. The other goes into a fund earning 8% a year, every dollar of growth reinvested. Same contributions: $18,250 by year 50. Watch the gap.

— Before You Watch · Place Your Bet —

After 50 years of $1/day, how much bigger is the compounded pile than the piggy bank?

Same $18,250 of contributions either way. Pick a gut number.

A. Roughly the same — a dollar's a dollar B. About 2× bigger C. About 5× bigger D. About 11× bigger E. About 50× bigger

Wealth from $1 a day, 8% reinvested | Years 0 — 50

Linear · piggy bank, no growth

Exponential · 8% reinvested

— The Verdict —

…

II.

The Lens

You won the lottery. The state offers you two options. One million dollars today — or fifty thousand a year for twenty-five years, totaling $1.25M. The annuity is more dollars. Which makes you richer?

— Before You Slide · Place Your Bet —

$1M now vs $50K/year for 25 years (totals $1.25M).
Which leaves you richer?

Same income obligations on the state, different timing. Pick gut.

A. Always the annuity — $1.25M is more than $1M B. Always the lump sum — a bird in hand C. Depends on the discount rate — what you can earn on cash

Present Value at Your Discount Rate

Discount Rate 5.0%

Lump Sum (now) $1,000,000 today

$1,000,000

Annuity $50,000 × 25 years = $1,250,000 nominal

$704,697

Lump sum wins by $295,303

— The Verdict —

…

III.

The Players

Cara

— Keeps It Safe —

$100,000 in a savings account. Earns about 0.5% a year. She never touches it. The number on her statement barely changes — and she sleeps soundly.

Brian

— The Patient One —

$100,000 in a portfolio of 10-year Treasuries, reinvested. Earns about 4.5% a year. Modest. Steady. Boring.

Sera

— Owns the Market —

$100,000 in the S&P 500, dividends reinvested. Earns about 9% a year on average. Volatile in any given year. Clear-eyed about the long run.

IV.

The Stage

— Before You Watch · Place Your Bet —

Cara puts $100,000 in a savings account.
30 years later, she's never touched it. What does it actually buy?

In today's-dollars purchasing power. Inflation averaged 2.6% per year. Pick a gut number — there's no penalty for being wrong.

A. About the same — $100K still buys $100K worth B. Roughly $80K — gentle erosion C. Roughly $70K — meaningful loss D. About $54K — nearly half gone E. Less than $30K

Account Value by Year | NOMINAL $ | $100,000 starting · 30 years untouched

Cara · Cash (0.5%)

Brian · Bonds (4.5%)

Sera · Stocks (9%)

Years elapsed

$1 in year 0 = $1.00 today

Saver	Balance	Real (today's $)	vs. Start
Cara	$100,000	$100,000	—
Brian	$100,000	$100,000	—
Sera	$100,000	$100,000	—

View

Scrub

— The Verdict —

…

The Reckoning

$100,000 Same starting amount. Three vehicles. Thirty years. The numbers in nominal dollars feel optimistic — until you ask what they actually buy.

Saver	Vehicle	Nominal $	Real $	Real Δ vs Start
Cara	Cash savings · 0.5% nominal	—	—	—
Brian	10-yr Treasuries · 4.5% nominal	—	—	—
Sera	S&P 500 · 9% nominal	—	—	—