"I Can't Afford to Lose My Money!"
News Flash! Stocks aren’t the Problem. Inflation Is.
📌 The Quick Hit
No one wants to lose their money, but it isn’t a reason to avoid investing.
The real enemy isn’t “risky” stocks - it’s the slow, silent rot of inflation.
Everything you own is losing value… you just don’t get a ticker flashing the bad news.
Cash feels safe but quietly shrinks. Property feels stable but isn’t immune.
The antidote: sensible investing, diversification, and stripping the drama out of money decisions.
Imagine a bright ticker hovering over every possession you own: your house, car, sneakers, watch, sofa, favorite jacket. A relentless, unblinking feed showing what each item is “worth” right now.
How would watching the value move and down every second make you feel?
A little queasy? A tad defensive? Maybe suddenly aware that your prized belongings are melting like ice cubes on a summer sidewalk?
That’s precisely the point.
🏝️ The Mirage of “Safe” Stuff
Plenty of people swear property is the only sanctuary. “Real assets. Solid ground. Safer than markets.” Sure, shelter is vital, and real estate has perks. But it’s not a magical vault.
There are carrying costs, unpredictable markets, and the simple fact that it’s not liquid. (Over the past 25 years, U.S. National House Prices appreciated ~4.9% annually. The S&P 500 appreciated ~8-11% annually.)
I often ask property-purists this:
“If your house had a live ticker on the roof - updating every few seconds - would watching the value move up and down still feel safe?”
Silence usually follows.
💸 Value Decays
We panic when stocks gyrate, but imagine if the depreciation of your everyday purchases were broadcast with the same theatrical flair. That new car? Its “ticker” plunges the moment you exit the dealership.
That designer bag, those jeans you needed, that limited-edition gadget? They all slide in value too. Some items glide more gently than others, but none float upward.
This isn’t bad. Spending is allowed - even encouraged - when it aligns with your budget and values. But it’s worth recognizing that everything decays.
📈 Inflation: The Silent Thief
People love the comfort of cash. “Cash is king!” was the old chant. The problem is simple: cash doesn’t stay king for long.
Inflation doesn’t confiscate your money - it is much more devious. Inflation erodes its power.
A quiet pickpocket, not a mugger.
If inflation is 3% and your savings account pays 0.5%, your $10,000 becomes $10,050… but buys only $9,750 worth of goods.
Stretch that over five years? You’re looking at roughly $8,843 of purchasing power from the original $10,000.
That’s not a haircut. That’s a buzz cut.
🤺 So How Do You Fight Back?
You beat inflation by growing your money faster than prices rise. Savings accounts won’t do it. CDs barely try. Bonds often can’t keep up (especially when paying fees to own them).
Global stocks, over long stretches, have historically delivered around 8–10% annually. Not perfectly, not every year, but reliably over time.
If you invested $10,000 in a broad market index like the S&P 500 - and simply let it sit - any rolling 5-year period over the last four decades produced positive returns.
The secret is maddeningly boring: patience.
👉 Money (And Sanity) Saving Reminders
1. Fight inflation by investing, not by sitting on cash.
Your dollars need a job, not a hammock.
2. Diversify.
A global mix of investments reduces the risk of catastrophic flops. Property alone won’t save you. One “hot stock” definitely won’t.
3. Use the Rule of 72.
Divide 72 by your expected return to estimate how quickly your money doubles. It’s a delightful little trick for long-term thinkers.
4. Identify the fears that freeze you.
Is it uncertainty? Headlines? Childhood stories about money? Name the gremlin. Then disarm it.
5. Strip out the drama.
Money decisions improve dramatically when feelings stop steering.
✨ Final Thoughts
The fear of “losing money” is universal… but the real loss happens in silence, through inflation, stagnation, and avoidance. Markets wobble. Prices fluctuate. But disciplined investing has historically outpaced the invisible tax eating your wealth.
Your future self isn’t asking for perfection - just participation.
🚀 Up Next:
Thursday - “Reasons to Be Grateful”
Sunday - “Burry, Bubbles & Buy Signals”
This publication is for brains, not bets. The Other Side of Obvious shares ideas, stories, and general financial information—not personalized investment, tax, or legal advice. Investing comes with risk (including losing money). Talk to a pro before you act. Please take time to read these important disclosures before you get started.