Many of us don’t think much about the “silent” things that erode our wealth. Most of us tend to think about our spending habits when we are considering what has an impact on wealth erosion. However, it is important that you consider inflation, taxes and fees when you make plans for the future.

One of the most obvious ways that wealth is eroded is through fees. However, you might not always be aware of the investment fees, bank account fees and other fees that you are charged. It’s important to read the fine print so that you understand just what is being charged to your account. Some fees, like investment fees, you will have to pay no matter what; the best you can do is shop around for the best bang for your buck. Other fees, like over the limit fees and late payment fees, can be easily avoided. And, of course, you can always switch banks if you are unhappy with account fees.

Another obvious one is taxes. However, since many of us have taxes taken out of a paycheck, they don’t register too much in our consciousness. As a result, it is important to pay attention. Periodically review your tax information, and look for ways to legally decrease your tax liability. Many people miss out on tax deductions and tax credits because they don’t know about them. Be proactive, and make sure you are doing what you can to reduce your tax bill. You can also adjust your withholding so that you aren’t getting as large a return. A return means that you are giving the government an interest-free loan, and that means you are losing in terms of opportunity cost. Put that money to your own use, earning more interest, rather than letting the government take advantage of it.


When most people think of financial competency, they often forget about inflation. Indeed, inflation is mostly silent, creeping up on you over time. However, it is important to factor inflation into your plans. This erosion of your buying power can mean that you are poorer over time. You need to plan your finances so that you are beating inflation, and so that your purchasing power keeps pace. In some cases, this means making well-informed investment decisions for the long-term as well as the short-term, cultivating income, and protecting some of your capital.

With the right planning, you can limit the erosion your wealth is subject to.