What $1,000,000 is worth after 30 years of 3% inflation
After 30 years of 3% inflation, what $1,000,000 buys today will cost $2,427,262, and $1,000,000 held in cash will buy only $411,987 worth of today's goods, a loss of 58.8%.
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The numbers for these inputs
| Year | Cost of the same goods | Buying power of the amount | Buying power lost |
|---|---|---|---|
| 1 | $1,030,000 | $970,874 | 2.91% |
| 2 | $1,060,900 | $942,596 | 5.74% |
| 3 | $1,092,727 | $915,142 | 8.49% |
| 4 | $1,125,509 | $888,487 | 11.15% |
| 5 | $1,159,274 | $862,609 | 13.74% |
| 6 | $1,194,052 | $837,484 | 16.25% |
| 7 | $1,229,874 | $813,092 | 18.69% |
| 8 | $1,266,770 | $789,409 | 21.06% |
| 9 | $1,304,773 | $766,417 | 23.36% |
| 10 | $1,343,916 | $744,094 | 25.59% |
| 11 | $1,384,234 | $722,421 | 27.76% |
| 12 | $1,425,761 | $701,380 | 29.86% |
| 13 | $1,468,534 | $680,951 | 31.9% |
| 14 | $1,512,590 | $661,118 | 33.89% |
| 15 | $1,557,967 | $641,862 | 35.81% |
| 16 | $1,604,706 | $623,167 | 37.68% |
| 17 | $1,652,848 | $605,016 | 39.5% |
| 18 | $1,702,433 | $587,395 | 41.26% |
| 19 | $1,753,506 | $570,286 | 42.97% |
| 20 | $1,806,111 | $553,676 | 44.63% |
| 21 | $1,860,295 | $537,549 | 46.25% |
| 22 | $1,916,103 | $521,893 | 47.81% |
| 23 | $1,973,587 | $506,692 | 49.33% |
| 24 | $2,032,794 | $491,934 | 50.81% |
| 25 | $2,093,778 | $477,606 | 52.24% |
| 26 | $2,156,591 | $463,695 | 53.63% |
| 27 | $2,221,289 | $450,189 | 54.98% |
| 28 | $2,287,928 | $437,077 | 56.29% |
| 29 | $2,356,566 | $424,346 | 57.57% |
| 30 | $2,427,262 | $411,987 | 58.8% |
How it works
Inflation compounds like interest. If prices rise by a steady rate each year, goods that cost one amount today cost amount x (1 + rate)^years after that many years.
The other side of it is buying power: money held in cash for that long buys only amount / (1 + rate)^years of today's goods.
Real inflation changes from year to year and differs between goods, so a single steady rate is an illustration. Use it to see the size of the effect, not to predict a price.
Common mistakes
- Ignoring inflation when judging a savings rate: a 3% account in a 3% inflation year gains nothing in real terms.
- Using the average inflation of one country for a price in another.
- Assuming every price rises at the headline rate; housing, food and electronics move differently.
Questions
How much will $1,000,000 of goods cost in 30 years?
$2,427,262 at 3% a year.
What will $1,000,000 be worth in 30 years?
In today's buying power, $411,987: inflation takes away 58.8% of it.
What inflation rate should I use?
Many central banks aim for about 2%; use the average rate of your country over a long period rather than one recent year.
How do I protect savings from inflation?
Earn a return at or above inflation: compare the interest rate with the inflation rate, and see the compound interest calculator for the effect of growth.
More inflation examples
- What $1,000 is worth after 10 years of 3% inflation
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- What $50,000 is worth after 25 years of 3% inflation
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