If crypto can’t beat inflation, it’s useless for wealth building

The older I get, the more I realize that my U.S. dollars are pretty worthless in the long run. Getting into crypto has really shed light on the fact that inflation will rob me of more than half my worth (taxes will rob that other half, but we can save that for a different post) by the time I retire.

Let's look at an example of how inflation affects a 401k: let's say you make $75k a year and get a decent 3% raise every year and contribute 10% of all of your hard earned paychecks with a company that matches 50% of up to 5% of that contribution. If that continues for 30 years and the market averages a 6% increase each year, your retirement balance will be $1 million. Yay right? Wrong. Here's why…

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bankrate.com/retirement/calculators/401-k-retirement-calculator/

…your $1 million in 2052 does NOT have the same value as $1 million today.

Your $1 million will only be worth about $476k of today's dollars in 30 years because of inflation.

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smartasset.com/investing/inflation-calculator

With crypto we have a chance to beat inflation by purchasing deflationary assets and/or staking/yield farming assets for higher percentage gains than inflation. For example, I used to think my savings account with a "high yield" interest rate of 0.5% was awesome. Now I realize that it will take 144 years for my bank account to double (look up the rule of 72). On top of that is that fact that every year my money in the savings account will be worth 2% less if inflation stays flat at 2.5% (last year it was 7% btw). With crypto, I can easily get an 8-12% interest rate on stablecoins, and that's using the less riskier options!

Then there's the idea of deflationary assets like Bitcoin (and arguably Ethereum after the London update). Not considering market volatility, the value of these would only increase over time because with Bitcoin there's a set number that will ever exist and with Ethereum more is burned than created (please correct me if I'm wrong).

Now I'm not trying to say that you shouldn't contribute to a 401k or try to save money in the bank, but what I am saying is this: inflation will rob you of more than half your worth in 30 years. Do what you want with this info, as for me: I'll continue to DCA and hodl.