Unit 1 · Level 1 · Why invest at all
Review: Why invest
Inflation quietly shrinks idle cash: €10,000 can lose nearly half its buying power over 20 years. Compounding runs the same maths in your favour, with returns earning returns until €200 a month becomes roughly €240,000 over 30 years at 7%. The price of admission is patience through scary headlines, plus a cash safety net so you're never forced to sell.
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What you get asked
Why is 'just leave it all in cash' a losing strategy over decades?
At 3% inflation, prices double in roughly 24 years, halving your cash's buying power. The nominal number survives; the value doesn't.
Returns earning returns of their own is called ___.
The snowball effect: small, regular amounts plus decades of reinvested growth. Its favourite fuel is time, which is why starting early beats starting big.
Match each idea from this unit to its core message
Four pillars: know your enemy (inflation), know your engine (compounding), know your edge (patience), know your foundation (the cushion).
Research on US stocks finds that missing the 10 best days over recent decades roughly does what to returns?
And those best days hide inside the scariest stretches. That's the case against market timing in a single statistic.
Your friend just got a bonus and wants to put ALL of it in stocks today, despite having no savings at all. Your best coaching?
Enthusiasm is great, but sequencing is better. Safety net first means the investments can be left alone to compound through anything. That's the whole game. 🐜
The rest of this unit
Inflation nibbles while compounding snowballs. The case for putting money to work.