Tools
Inflation Calculator
The balance goes up. What it buys goes down. Inflation is the only loss that never appears on a statement — which is exactly why it is the one people ignore.
Your real rate
0.00%
—
Statement will say
€0
It will actually buy
€0
Quietly lost
€0
Illustrative arithmetic at a constant rate. Real inflation varies year to year, and your personal rate depends on what you actually buy — rent, energy and food have behaved very differently from the headline index. Excludes tax on interest. Not financial advice.
Why cash feels safe and is not
Ask someone whether their savings account is risky and they will say no. Ask them whether they would accept a guaranteed, certain loss of 1.5% of their wealth every single year, and they will say absolutely not.
These are the same question.
The difference is only that one loss is visible — a number on a screen going down — and the other is invisible, expressed as the same number buying steadily less. Human beings are extraordinarily bad at pricing the second kind.
A portfolio that cannot fall is also a portfolio that cannot grow. There is no third option, and pretending otherwise is how a generation of savers ended up poorer while feeling prudent.
What this does not mean
It does not mean cash is bad. An emergency fund belongs in cash precisely because you cannot afford for it to fall 30% in the month you lose your job. Short-dated money — anything you need within two or three years — belongs in cash or short bonds, and inflation drag is the correct price to pay for that certainty.
The mistake is not holding cash. It is holding cash for twenty years and calling it the safe option.