Real Wealth Calculator
Compare Savings vs Investing with Inflation, Taxes, and Fees factored in.
Core Inputs
Wealth Growth
Master Your Money
The Silent Wealth Killers: Inflation and Fees
Most savings calculators lie to you. They show you a big number in 30 years—say, $1,000,000—and you feel rich. But they forget to meaningfuly subtract two things that eat away at your wealth: Inflation and Taxes.
Our Real Wealth Calculator is different. It doesn't just show you the "Nominal Value" (the face value number on the check). It calculates the "Real Value"—what that check can actually buy in terms of today's groceries, housing, and travel. It forces you to confront the reality that a "safe" savings account earning 2% is actually losing value every single year when inflation is 3%.
Advanced Analysis Features
Inflation Adjustment
Toggle "Real Value" to see your purchasing power discounted by the annual inflation rate (avg 3%).
Tax Drag
We apply Income Tax to annual savings interest vs lower Capital Gains Tax to investment profits.
Expense Ratios
See how even a small 1% mutual fund fee destroys 20% of your long-term wealth.
Savings Account vs. Stock Market
| Feature | High-Yield Savings (HYSA) | Stock Market (ETF) |
|---|---|---|
| Avg Return | 0.5% - 5% (Varies by Fed Rate) | 7% - 10% (Historical Avg) |
| Risk Level | Very Low (FDIC Insured) | Medium / High (Volatile) |
| Tax Treatment | Taxed Annually as Income (Expensive) | Taxed only when Sold (Capital Gains) |
| Best Timeframe | Short Term (Emergency Fund, < 3 yrs) | Long Term (Retirement, > 10 yrs) |
The Rule of 72
Want a quick mental shortcut? Use the Rule of 72 to estimate how many years it takes to double your money.
Simply divide the number 72 by your annual interest rate.
- Savings (2%): 72 ÷ 2 = 36 Years to double.
- Investing (8%): 72 ÷ 8 = 9 Years to double.
In the stock market, your money could double 4 times in the same period a savings account doubles once.
Time in the Market
New investors often try to "time the market"—buy exactly at the bottom and sell at the top. This rarely works.
The old adage is true: "Time in the market beats timing the market." Missing just the 10 best days of the stock market can cut your total returns in half over a 20-year period. The most reliable strategy is simply to start early and contribute consistently.
Frequently Asked Questions
What is the difference between 'Nominal' and 'Real' return?
Nominal Return is the raw percentage number you see on your statement (e.g., your account grew by 8%). Real Return is that number minus inflation. If your account grew 8% but inflation was 5%, your Real Return (increase in purchasing power) is only roughly 3%.
Is investing in the stock market safe?
Investing always carries risk. Historically, the S&P 500 has returned about 10% annually over long periods, but it can drop 20-30% in a single year. Savings accounts are insured (FDIC) and generally risk-free, but they barely keep up with inflation.
How do taxes affect my returns?
Interest from savings accounts is taxed as Ordinary Income, often at a high rate (10-37%). Long-term gains from stocks are taxed as Capital Gains, usually at a lower rate (0-20%). This tax advantage can add up to tens of thousands of dollars over decades.
What is an 'Expense Ratio'?
It is the annual fee charged by a mutual fund or ETF to manage your money. A 1% fee might sound small, but over 30 years, it can eat up 25% or more of your total potential wealth. Always look for low-cost index funds with ratios under 0.1%.
What is the 'Rule of 72'?
It's a shortcut to estimate how long it takes to double your money. Divide 72 by your interest rate. At 8% return, your money doubles in 9 years (72 ÷ 8). At a 2% savings rate, it takes 36 years.
Should I pay off debt or invest?
Compare the interest rates. If your credit card debt costs 20% interest, paying it off guarantees a 20% 'return', which beats any investment. If your mortgage is 3%, you might be better off investing where you could earn 7-10%.
Why does inflation matter for savings?
Inflation reduces what you can buy with a dollar. If you save $100 today, in 20 years it might only buy $60 worth of groceries. Investing aims to grow your money faster than costs rise, preserving your future lifestyle.
What is a High-Yield Savings Account (HYSA)?
An HYSA is a bank account that pays a much higher interest rate (often 10x-20x higher) than a traditional checking account. They are great for emergency funds but rarely beat the stock market for long-term growth.
Do I lose money if the market crashes?
You only lose money if you sell during the crash. If you hold onto your diversified investments, history shows the market eventually recovers and reaches new highs. This is why investing is for the long term (5+ years).
What is 'Dollar Cost Averaging'?
It implies investing a fixed amount every month (e.g., $500) regardless of whether the market is up or down. This removes emotion from investing and ensures you buy more shares when prices are low.