If you don't preserve your assets, how far can your family's wealth go? — From the founding of the country to 2026: A survival guide through inflation cycles

Introduction: Why Is Money Becoming More “Thin”?
Have you noticed that in your grandfather’s generation, one penny could buy a piece of candy; now, you might not even bend down to pick up a dollar bill that drops on the ground? Parents often say that in the 1980s, a salary of a few dozen yuan could support a family, but now, with monthly salaries in the thousands, it still feels insufficient. This is not an illusion—inflation is silently eroding wealth. Ten thousand yuan in 1978 has the equivalent purchasing power of 14.47 million yuan in February 2026; ten thousand yuan in 1988 is equivalent to 1.66 million yuan today. This means that if cash is hidden under the bed, wealth shrinks by more than half every decade.

This article will analyze the 76-year economic trajectory since the founding of the People’s Republic, examining how inflation erodes household wealth and outlining the trends of wealth flow across different historical stages.

Part One: The Evolution of Currency and the Truth About Inflation (1949–February 2026)

1949–1952: The Ruins of Hyperinflation
At the founding of New China, the remnants of the Kuomintang’s hyperinflation caused prices to run wild. In January 1949, 1 US dollar exchanged for 80 old renminbi; by March 1950, it had depreciated to 1 dollar for 42,000 old renminbi. After currency reform in 1955, the exchange rate between new and old renminbi reached 1:10,000, stabilizing the currency initially. Key lesson: During post-war economic reconstruction, cash was poison; food and gold were the lifelines.

1953–1978: “Invisible Inflation” Under Planned Economy
Food coupons and cloth tickets became hard currency, and prices appeared stable, but the currency’s purchasing power was artificially suppressed. In the 1960s, 0.14 yuan could buy a jin of rice with a food coupon, while workers earning 40 yuan a month could hardly buy a few items. The real truth about wealth: During this period, accumulating wealth was not about saving money but about “getting tickets”—families that obtained food and cloth tickets had a standard of living far above ordinary workers.

1979–2026: The Complete Cycle of Inflation
After the reform and opening up in 1979, inflation officially began:

1985–1988: Price surges triggered inflation, with CPI reaching 18.8% in 1988. Small business owners earning 50,000 yuan annually deposited in banks, but their real purchasing power shrank by over 60%.
1994: CPI hit a peak of 24.1%, and the savings of “ten-thousand-yuan households” were swallowed by inflation.
1998–2002: Asian financial crisis led to deflation, with CPI negative for 39 consecutive months, making cash the safest asset.
2003–2007: Economic boom after WTO accession, with housing prices rising an average of 20% annually, but the 2008 financial crisis shrank wealth by 30%.
2016–2020: Housing prices doubled in third- and fourth-tier cities due to monetization of shantytown redevelopment, but the “three red lines” policy in 2021 caused the real estate market to enter a correction phase.
2023–February 2026: CPI remains low (average 0.8% in 2025), real estate sales area turns positive year-on-year, and the economy enters a stage of “mild recovery + deflation pressure.”

Inflation of Food and Consumer Goods Record

In January 1985, one jin of rice cost 0.14 yuan; by February 2026, it rose to 3.0 yuan. In 1985, one jin of pork was 0.95 yuan; by 2026, it increased to 20.0 yuan. Key finding: essential goods prices increased about 21 times, but core city housing prices rose from 500 yuan per square meter in 1998 to 60,000 yuan in 2026—an increase of over 120 times. This means that with the same 10,000 yuan, investing in real estate yields over ten times more profit than depositing in a bank.

Part Two: The Golden Age and Lessons of Wealth Flow (1978–2026)
1978–1984: “Farming for Prosperity” Under Land Contract System
The household contract responsibility system shifted farmers from “collective farming” to “farming for themselves.” In 1979, grain output grew by 9%, and farmers’ incomes surged. Wealth case: Farmers in Xiaogang Village, Fengyang, Anhui, earned 500 yuan from farming in 1980 (compared to a worker’s annual income of 400 yuan), but lacked investment awareness and relied solely on farming for basic needs. Meanwhile, Zhejiang farmers exchanged surplus grain for money and invested in small commodity trade, doubling their income. Lesson: Land is the foundation, but without investment, wealth stagnates at subsistence.

1980–1990: The “Get Rich Quick” Trap of Individual Entrepreneurs
Legalization of individual businesses in 1980, with monthly incomes reaching 300 yuan by 1985—7.5 times the salary of state-owned enterprise workers at 40 yuan. The truth about wealth: At that time, “selling tea eggs made more money than engineers,” but most people kept money in banks. In 1988, inflation was 18.8%, and bank deposits depreciated by 10% in real terms; in 1994, inflation reached 24.1%, and deposit purchasing power shrank by 60%. Comparison case: Shanghai entrepreneur Wang stored 50,000 yuan, which by 1994 was worth only 20,000 yuan; meanwhile, Li bought a house with 30,000 yuan and sold it in 2005 for 20 times the original price.

1992–2007: The “Going Offshore” Wave and the Golden 20 Years of Real Estate
Deng Xiaoping’s southern tour in 1992 ignited the offshore trend, and housing reform in 1998 launched a real estate bull market. Wealth flow:

In 1998, Beijing’s housing price was 500 yuan per square meter; by 2007, it soared to 8,000 yuan—an annual increase of 25%.
In 2005, the Shanghai Composite Index was 1,200 points; by 2007, it surged to 6,124 points—an annual increase of 50%.
Key lesson: Investors who entered the market at the peak in 2007 suffered a 73% loss when the index fell to 1,664 in 2008; those who invested steadily in index funds over 10 years gained over 200%.

2008–2026: Survival Wisdom in Cyclical Fluctuations
After the 2008 financial crisis, the “Four Trillion Yuan” stimulus boosted housing prices. In 2016, the “housing not for speculation” policy was implemented, and by 2023, real estate sales bottomed out and began to recover. Current assessment: by February 2026, core city housing prices have stabilized, but third- and fourth-tier cities are still adjusting. Wealth lesson: real estate cycles last about 20 years; from 1998 to 2017, prices rose, but after 2018, the market entered a phase of divergence and correction.

Part Three: The Ultimate Weapon for Asset Preservation—Learning from Buffett and Munger

1. Buffett’s “Circle of Competence” Principle: Focused Investment Within Your Knowledge Scope
   Buffett never diversifies excessively but concentrates within his understanding. Early on, he invested 80% of his funds in a single textile business; later, he shifted to Coca-Cola because he drank it daily and understood its brand value. In 2016, he heavily invested in Apple because his daughter used an iPhone, understanding the mobile ecosystem.

Operational Tips:

Ask yourself: Do I truly understand this investment target? (e.g., if you don’t understand chip technology, avoid semiconductor stocks)

Then ask: Is my knowledge deep enough? (e.g., Buffett studied Coca-Cola for 20 years before heavily investing)
Finally: Invest only in 1–2 core assets, not 10 “know a little” targets.

Case: In early 2020, Buffett sold airline stocks (due to lack of understanding of the industry), but held onto Coca-Cola (due to clear understanding). By 2023, Coca-Cola’s stock price had risen 35%.

2. Munger’s “Margin of Safety”: Always Leave Room for Error
   Munger says: “Investing isn’t about making money; it’s about avoiding losing money.” He insists on buying at least 20% below intrinsic value.

Operational Tips: Calculate the margin of safety: for example, if a property’s assessed value is 1 million yuan, buy it for 700,000 yuan.

Avoid “hot” stocks: In 2021, the new energy vehicle craze led Munger to warn “don’t chase if you don’t understand the technology,” resulting in many concept stocks halving.

Case: In 2022, real estate stocks in A-shares plummeted—Evergrande and Sunac fell over 90%, but Poly and Vanke, with valuations 30% below intrinsic value, only declined about 20%.

3. Bank Large-Denomination Certificates of Deposit: The Conservative “Cash Preservation Tool”
   Since 2023, large-denomination CDs (starting at 200,000 yuan) have seen steadily rising interest rates:

3-year rate at 2.75% (February 2026 data), 0.75% higher than regular deposits;
Deposits under 1 million yuan are protected by the Deposit Insurance Regulation, safe and risk-free.
Why is this important: During the low CPI period from 2023 to 2026 (average 0.8%), large CDs can outpace inflation and offer better liquidity than fixed-term deposits.

Practical advice: Allocate 50% of emergency funds (3–6 months’ living expenses) into large CDs and 50% into money market funds (like Yu’e Bao, with an annualized return of 2.5%).

Part Four: Practical Asset Allocation Guide for February 2026

1. The “Buffett-style” Principle for Family Asset Allocation

Principle Traditional Diversification Buffett’s Concentration
Core Logic “Don’t put all eggs in one basket” “Put all eggs in one basket, but make the basket big enough”
Suitable For Risk-averse newcomers Those with clear understanding and research ability
2026 Recommendation 40% bonds + 30% stocks + 20% real estate + 10% gold 60% core assets (e.g., index funds + core city real estate) + 40% cash + bonds
Why This Mix?

In 2026, CPI remains low (0.8%), bonds yield about 3.5% annually, beating inflation;
Stock valuations are at historic lows (Shanghai PE ratio around 12), suitable for dollar-cost averaging;
Real estate should focus on “core city, prime locations,” avoiding third- and fourth-tier markets;
Gold (around 930 yuan per gram in 2026) as a hedge.

2. Specific Asset Allocation Plan (Family Version) for February 2026
   Cash Account (20%):

10%: Large-denomination CD (3-year term, 2.75%)
10%: Money market fund (annualized 2.5%, liquid at any time)

Reason: To prepare for possible economic fluctuations in 2026, maintaining liquidity.
Stable Income Account (40%):

30%: High-grade bond funds (annualized 3.5%, low volatility)
10%: Gold ETF (hedging geopolitical risks)

Reason: Falling interest rates increase bond yields; gold preserves value during inflation.
Growth Account (35%):

25%: CSI 300 index fund (dollar-cost averaging, 8% annualized)
10%: Core city real estate (owner-occupied + small investment units, 3–5% annualized)

Reason: Buffett says “the stock market is a weighing machine in the long run,” and index funds are the best choice for ordinary investors; real estate should be “in core areas of first- or strong second-tier cities” with clear understanding.
Protection Account (5%):

Insurance (critical illness + medical)

Reason: Munger’s saying: “Without a safety cushion, wealth will vanish.”
Key Reminders:
In February 2026, avoid high leverage when buying property, and avoid chasing rising prices and selling at lows. For example, someone who bought third- or fourth-tier real estate at high prices in 2023 could face a 20% loss by 2026, while property bought in core districts of Hangzhou in 2020 appreciated by 25%.

Conclusion: Wealth Preservation Is a Marathon of Cognition
Reviewing 76 years of economic history, we see:

In the 1980s, individual savers’ wealth was swallowed by inflation;
In the 1990s, those who went offshore lacked proper asset allocation, and wealth stagnated at subsistence levels;
Post-2008, those who bought at high points were trapped for 15 years;
Meanwhile, Buffett-style “cognition-driven concentration investors” achieved intergenerational wealth transfer.

Ultimate February 2026 Advice:

First, learn: spend three months studying one field (such as consumption or technology) until you can clearly explain its profit model;
Then, reinvest: within your knowledge scope, allocate 60% of your funds to 1–2 core assets;
Always keep a fallback: 40% of your funds in liquidity to avoid market traps.

Buffett’s words: “Investing is simple, but not easy.”
Munger’s words: “Wealth isn’t luck; it’s cognition.”
Starting now, stop dreaming of “saving for inflation.” Use cognition to drive wealth, and your family’s wealth can go further.

This article is based on February 2026 economic data and does not constitute investment advice. Investing involves risks; decisions should be made cautiously.