Chapter 1 of 10All chapters
Chapter 1 of 10
Why invest at all
Inflation is the reason.
Cash loses value
Prices rise over time, so money held as cash buys less each year. Investing is an attempt to grow faster than that erosion, in exchange for accepting fluctuation.
- At 3 percent inflation, money halves in purchasing power in about 24 years.
- Cash is still right for money you need soon, because it does not fall when you need it.
Return comes from somewhere
Shares return a portion of company profits, bonds return interest, property returns rent. If you cannot say where a return comes from, that is important information.