Back in my day—before people started worrying about their cholesterol and before a dollar had the lifespan of a mayfly—you could get yourself a soda for a dime, a brand-new car for a couple thousand, and a house for ten grand if you didn’t mind a little elbow grease. That was the prices when I was a kid. These days, the same things will set you back thirty times as much, and yet, curiously, nothing has changed. The numbers got bigger, but the dance stayed the same. It’s like the tide—coming in and going out—always settling back where it belongs.
Folks love to squawk about financial crises and bubbles, as if some great mystery of the universe has been uncovered when house prices suddenly plummet after an artificial rise. But money, like water, finds its level. It always has, and unless some banker finally figures out how to reverse the laws of physics, it always will. The trick is understanding the tide before it sweeps you out to sea.
The Great Illusion of Wealth
When I was a kid, a soda was 10 cents, wages were about 75 cents an hour, a regular new car was about $2,000, and a decent house $12,000. Ten years ago, when I first wrote this post, the same soda was $1, wages about $7.50 an hour, a car about $20,000, and a decent house about $200,000. Today, in 2025 you can double these numbers. But has anything changed? Not really. Even though everything is thirty times more money, the ratio between the items hasn’t increased.
When everyone said there was a real estate bubble, that $200,000 house was selling for $350,000. Obviously, things were off balance, and they got adjusted back. It is now worth what it is really worth—$200,000. Nothing has changed, and like the sand at the beach, eventually, it all levels out. Now it is worth $400,000
If your $200,000 house is worth $400,000, then your $20,000 car will be $40,000. But if you had to pay for it in today’s dollars, you are still poor. The trick would be to somehow carry that money back through time. Let us say I sold my $200,000 house today, went back to 1970, and then bought 10 homes. Today I would have 2 million dollars in real estate. The idea, of course, is ridiculous, but it shows the power of growth over time.
The Futility of Saving
So instead, let’s save a dollar a day for 40 years. That’s $1 × 365 × 40 years, which comes out to $14,600. That is also called dollar cost averaging—investing the same amount of money over time. Fourteen thousand dollars is not much to get excited about, but it is better than nothing.
Also, think about this: the first $1 a day you saved decades ago was worth a lot more than today’s dollar. Inflation erodes its power. Change that to $10 a day, and now you have $146,000. However, it took you forty years to save it. And what will that buy in 40 years? A car? The point is, you can’t save your way to retirement.
The Bank’s Game, Not Yours
Now, let’s invest our money in a bank CD. Typically, they pay about the cost of inflation. So when inflation is zero, they give you something barely above it. The only way to get a good deal on a bank CD is during a period of high inflation that is then followed by a period of low inflation. Then you extend the CD term to as long as possible. But that kind of opportunity happens only once in a lifetime.
Banks are simply not in the business of making money for you. Got that?
So back to our $10 a day for 40 years, now using a bank CD. The math gets a little more complicated because of compound interest. At the end of forty years, you have contributed $146,000 via $10 a day. You made an extra $34,000 via compound interest. If we were smart enough to put this money into an IRA, we would have saved the taxes that would have eaten away at compounding interest. But still, after 40 years of disciplined saving, you’d barely have enough to buy a Toyota Corolla.
Oh, and I forgot to mention—whatever part was tax-deferred, you’ll pay the taxes now when you take it out. So obviously, we need a better way to grow money over time—one that doesn’t involve giving a third of it to the IRS.
The Great Truth About Wealth
There are lots of ways to make more money. The old “Risk versus Reward” equation comes into play, and the peddlers of greed are always out to get your money.
It is virtually impossible to save your way to retirement. Not in today’s dollars.
Conclusion
Now, if you’ve been paying attention—and if you haven’t, well, you’d make an excellent financial advisor—you should see the problem clear as day. The banks aren’t your friend. Inflation eats away at your savings faster than a kid eats Halloween candy. And “saving” money without a strategy is like trying to fill a bathtub with the drain open.
So what’s the answer? Well, that depends on how bold you are. Some folks take risks. Some start businesses. Some invest in assets that outpace inflation. And some, convinced they’ve cracked the code, throw their life savings into the latest “sure thing,” only to discover it was more of a black hole than a gold mine.
The key isn’t just making money—it’s understanding how it moves, where it hides, and how to make it work for you. Because at the end of the day, if your plan for retirement is built on nickels and dimes, you might want to get comfortable with the idea of working until they carry you out feet first.
So you need away to not only keep up with inflation but beat, and beat it by a lot. Perhaps you can use leverage like when you buy a house.
LEARN what NO ONE has TAUGHT YOU about MONEY HERE
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