'Rs 1 crore = Rs 25 lakhs in 20 years': How to beat inflation and build wealth sustainably? Here’s what this financial expert says

While SIPs and investment advisers often go by the power of compounding with taglines such as “make Rs 10 crore in 20 years by investing Rs 10,000 every month”, one often overlooked factor is the impact of inflation on returns. 

Inflation has the ability to erode the buying power of money every year, making things more expensive and pushing people to keep earning and investing wisely, says financial expert Akshat Shrivastava. In a tweet Thursday, the founder of Wisdom Hatch listed down what the value of Rs 1 crore will be years from now assuming an inflation of 7%. 

10 years from now = Rs 50 lakhs  
15 years from now = Rs 36 lakhs 
20 years from now = Rs 25 lakhs   

Hence, if you think having Rs 1 crore today guarantees financial security in the future, its unwise to not account for inflation. 

So, why can’t we eliminate inflation permanently? Wouldn’t that ensure stable wealth?  However, according to modern monetary theorists, the answer is simple — if there’s no inflation, people will save enough, relax, and stop working. 

But how is inflation created?

Governments and central banks use a simple tool to reduce the value of money over time—printing more currency. The more money in circulation, the lower its purchasing power.

Since 2018, global money printing has averaged 8% per year, fueling inflation and reducing the real worth of savings.

So, the only way to protect your wealth is by beating inflation. "So yes: a SIP of 500 might give you 123 crores after 213 years. But, the buying power of it: won't be much," Shrivastava says. 

The key to sustainable wealth-building is investing smartly in assets that outperform inflation. "Nuanced investing is the way to go," he concludes the tweet.