TFW - Inflation and Purchasing Power — How Rising Prices Quietly Eat Your Wealth (and How to Fight Back)

Welcome back to The Financial Wagon — today we’re tackling the silent money thief that hits every wallet, every household, every year: inflation. It creeps in quietly… and before you know it, your dollars don’t go as far as they used to.

If you’ve noticed your grocery bill creeping up, your rent rising, or your money not stretching as far as it used to, you’re not imagining it — that’s inflation doing what it does best: silently draining your purchasing power.

Inflation is one of the sneakiest forces in the financial world because it doesn’t feel like a sudden shock. It’s slow, steady, and subtle… until one day, you ask yourself, “Why does everything feel more expensive?”

Let's break down what inflation actually is, how it impacts your daily life, and most importantly — how to fight back so your wealth grows faster than prices do.

Inflation is the increase in the price of goods and services over time.
In other words, the value of your money decreases as prices rise.

If inflation rises 5%, the $100 you saved last year now only has the buying power of $95. That may seem small, but over time, it adds up — fast.

Inflation happens for several reasons:

Whatever the cause, the effect is the same: your money loses strength.

You feel inflation every day — even if you don’t notice it.

A cart of food that cost $80 a few years ago may cost $110 today.

Landlords adjust prices based on their own rising costs.

If your savings account pays 1%, but inflation is 4%, you’re losing 3% in buying power.

If you get a 4% raise but inflation is 6%, your real income actually fell by 2%.

This is one of the only “good” parts — inflation reduces the real value of fixed-rate debt over time.

Inflation is like a leak in your financial bucket. If you don’t patch it, your wealth will slowly drain away.

Purchasing power is the true measure of wealth — not how much money you have, but what your money can buy.

Here’s the big idea: If your money isn’t growing faster than inflation, you’re losing wealth.

A $10,000 savings account earning 1% interest with 5% inflation doesn’t grow — it shrinks.

That’s why people who focus only on saving (and not investing) fall behind financially.

You can’t stop inflation — but you can outsmart it.
Here’s how:

Historically, the best inflation fighters are:

Keeping money only in a savings account is like leaving it in the sun — it melts slowly.

Inflation punishes stagnant income.
To stay ahead:

Income growth is one of the strongest inflation counterattacks.

Inflation makes fixed debt (like a mortgage) cheaper in real terms because the value of the payments shrinks over time.

Example:
A $1,500 mortgage payment today might feel heavy,
but 10 years from now — with higher income — it may feel light.

Aim for 3–6 months of expenses in a high-yield savings account.
Everything else?
Put it to work in investments that grow faster than inflation.

If inflation hits 6% but your lifestyle inflates 15%, you’ll always feel broke.
Be intentional about spending — especially during high inflation cycles.

When inflation is high, the Federal Reserve raises interest rates to slow down spending.
This can lead to:

Knowing this helps you prepare mentally — and financially.

Inflation isn’t dramatic, loud, or obvious — but it’s relentless.
It quietly eats away at your ability to buy, save, and build wealth.

But you’re not powerless.

By investing wisely, increasing your income, managing debt strategically, and understanding how money works in a changing economy, you can stay ahead of rising prices — and turn inflation from a threat into just another number.

Because real wealth isn’t about how much money you have.
It’s about how much your money can buy — and how well it grows.

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That’s All For Today

I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙

— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.

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