What is inflation?
Why doing nothing has a cost.
Simple explanation
Inflation is the slow rise in prices. Same money, less stuff over time. About 2-3% per year is normal in healthy economies.
Picture this
Like a balloon slowly losing air. Same balloon shape. Smaller inside. Same number of euros in your hand, fewer ice creams it buys.
— Tally
Real example
A €1 ice cream in 2010 might cost €2 in 2026. Same ice cream. Doubled in euros. That's roughly 50% lower purchasing power for cash held over those years.
Common mistake
Believing cash is risk-free. Cash IS risk-free against the market going down — but it slowly loses value to inflation every year you hold it.
Quick check
Why is leaving large amounts in cash a slow risk?
Takeaway
Cash protects you from market drops. Investing protects you from inflation. You need both — but not for the same money.
⚠️ Educational only · Never financial advice