Unit 1 · Level 1 · Why invest at all
The silent leak
A mattress full of euros feels safe, because the notes never disappear. But prices creep up every year, so each note quietly buys a little less. In 2022, eurozone inflation briefly ran above 10%, and even a 'normal' 2-3% steadily shrinks what your savings can buy. Inflation is the reason doing nothing with money is not a neutral choice.
Free to play. No ads, no token, no account needed to start.
What you get asked
You hide €5,000 in a drawer for ten years. Inflation runs at 3% a year. What actually happens?
Inflation never touches the number printed on the note. It raises the prices around it instead. Same €5,000, smaller trolley of groceries.
You stash €10,000 in cash. At 3% inflation for 20 years, it loses roughly 45% of its buying power. Roughly how much is it worth in today's purchasing terms?
Roughly €5,500. Nearly half the real value is gone, and you never spent a cent. That slow leak is the quiet cost of leaving money idle for decades.
Rule of thumb: divide ___ by the yearly inflation rate to estimate how many years until prices double.
The rule of 72 works for any steady growth rate. At 3% inflation, prices double in roughly 72 ÷ 3 = 24 years, which means your cash halves in buying power.
Use the rule of 72: match each inflation rate to how long prices take to double
Small differences in the rate make a huge difference over time. Soon that same maths will work FOR you. It's called compounding.
Why do investors say holding only cash is not truly 'risk-free'?
Cash dodges market crashes but walks straight into inflation. Nobody is saying abandon cash. Just don't leave ALL your money on the melting ice. 🐜
The rest of this unit
Inflation nibbles while compounding snowballs. The case for putting money to work.