R100k today won’t have the same purchasing power in 20 years time, because money is always worth less as time goes on – known as inflation. The reason? On the 15th August 1971, everything changed. That’s when America ended the gold standard.
Before that day, the dollar (and any currency) was related directly to a piece of gold. Ending the gold standard, meant that currency became something that could change. One day a piece of gold could be worth $15 and the other day worth $18.
Every time a currency bill is printed, it devalues the currency and slowly every currency will drop to zero. Many countries are covered with debt and it’s an inevitability that the currency system will fail. Inflation is something that strongly affects your purchasing power and your financial independence.
That’s why investing in property is so important, because if you can get a property to bring you a return of 12% per annum, you are beating the inflation curve and slowly increasing your wealth over time, instead of losing it!