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Inflation Calculations: The Rule of 72 and Cash Returns

Understand the impact of inflation on your cash returns using the Rule of 72. Learn how your purchasing power decreases over time and plan ahead. Stay informed and make wise financial decisions.

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Inflation Calculations: The Rule of 72 and Cash Returns

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  1. Net foreign purchases of equities (annual)- R52bn in 2009 Rbn 1

  2. Cash returns vs Inflation: 1999 – 2008 The rule of 72 states (approximation) that at an inflation rate of 8.6%, the purchasing power of your cash would halve every 8.4 years rounded off - so the purchasing power of R200 000 would essentially be worth R100 000 after 8.4 years.

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