Kristia van Heerden

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Inflation refers to how much you can buy with the same amount of money over time. R100 can buy you a bread, milk and a dozen eggs today. If those products become 10% more expensive within a year, you will need R110 to buy the same products next year. If you keep all your savings in cash, your cash will be worth less when you use it than when you saved it.

This is discussed in more detail in these posts:

OUTstanding money: The inflation monster

Cash Club: Compounding vs inflation

Wealthy Maths: Calculate inflation

Wealthy Maths: Nominal vs effective interest

Podcast: Capital gains and inflation