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Historically, the US stock market has grown about 10% per year while the US bond market has grown 5% annually compared to inflation of 3%. One common measure of the US stock market is the S&P 500, an index of the 500 largest publicly traded companies in the United States. According to Investopedia, the S&P 500 index has grown at an annualized average return of 10.26% since its inception in 1957 through the end of 2023. 

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When different growth rates are amplified by the power of compound growth over many years, the results can be significant. To help visualize this, the graph below shows the growth of an initial investment of $1,000 at different growth rates over a 40-year period. If we assume a 3% inflation rate, similar to the average over the past hundred years, we see that in 40 years it will take $3,262 to equal the same purchasing power as $1,000 today.  

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Note that a 2% savings account would not even keep up with inflation growing to only $2,208.  The 5% annual return for bonds does stay ahead of inflation growing to $7,040 over 40 years, but the difference between stocks and bonds when invested over many decades is significant.  That same initial $1,000 when invested in the stock market (for example, in an S&P 500 index fund), assuming a 10% annual return, would grow to be worth $45,259, almost 15 times more than inflation and 6 times the return of bonds.  

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