Why You Must Start Investing Now: The Hidden Truth About Money and Inflation

In this article I want to share a critical financial insight that most people overlook—why investing is not just an option but a necessity. This post will unveil a hidden secret about money, explaining why inflation is silently eroding your wealth and how investing is your best defense against it.

If you want to watch my video on this topic you can find it on YouTube here

The Hidden Trap: Trading Time for Money

Most people earn money by trading their time for it—whether through employment or running a business. The problem? Our time is finite, yet the money we earn loses value over time due to inflation. This means that if you are not investing your money, you’re effectively getting poorer year after year.

Inflation: A Government-Created Phenomenon

Inflation is often perceived as a natural economic force, but in reality, it’s a product of how our monetary system is structured. If you’ve noticed prices rising over the years—groceries, rent, fuel—it’s not because things are getting scarcer but because of the way our currency system operates.

A great book that explains this concept in detail is The Price of Tomorrow by Jeff Booth. He argues that as technology advances, our ability to produce goods and services more efficiently should make everything cheaper. However, instead of prices falling, governments intervene by printing more money, causing inflation and devaluing our purchasing power.

I highly recommend reading The Price of Tomorrow if you want a deeper understanding of how inflation and deflation work in the modern economy and how you can protect your wealth from monetary debasement.

How Money Printing Steals Your Wealth

To understand why inflation happens, you need to grasp how fiat currency works. Modern currencies (USD, EUR, GBP, etc.) are not backed by gold or any tangible asset—they exist purely because we trust governments to maintain their value.

But here’s the issue: Governments and central banks can print more money whenever they want, diluting the value of existing money. This is exactly what happened during the COVID-19 crisis when trillions of dollars were injected into the economy.

To understand this better we need to look at the M2 Money supply which is a measure of the total money supply in an economy that includes things like cash in circulation, money in checking and savings accounts and other forms of liquid and near-liquid money.

Looking at the U.S. M2 money supply data:

• In the 1960s, there was about $300 billion in the system.
• Today, there is $21.5 trillion—a 7000% increase.
• Since 2015 alone, the money supply has increased by 81%.

This rapid increase in money supply means that your savings are losing value at an accelerated rate.

The Half-Life of Money: How Fast Your Wealth Disappears

A useful way to understand inflation’s impact is the half-life of money—the time it takes for a currency to lose half of its purchasing power. Historically, for the U.S. dollar, euro, and pound, this is around 10 years. This means that $100 saved today will only buy what $50 can in a decade.

Governments intentionally allow this to happen because it helps them reduce the real value of their debt. But for everyday people, this is effectively a stealth tax on our hard-earned money.

The Only Solution: Invest to Outpace Inflation

If you want to preserve and grow your wealth, you must invest in assets that provide returns higher than the rate of inflation. Here’s what you need to aim for:

✅ A minimum return of 10% per year

✅ Investments in stocks, real estate, or alternative assets

✅ Avoiding low-yield savings accounts that don’t beat inflation

Why 10%? Because:

• Inflation (even when underreported) is 3–8% annually.
• Investment gains are taxed, further reducing net returns.
• Only high compounding returns can ensure real wealth growth over time.

Take Action: Protect Your Future

The bottom line? If you’re not investing, you’re losing money. Every year that you sit on cash, inflation eats away at its value, effectively stealing your past labour.

🔹 Start learning about different asset classes.

🔹 Move your money into investments that beat inflation.

🔹 Don’t wait—time is your biggest ally when it comes to compounding returns.

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