Small losses in investments vs. inflation.

[Questat]

Because some people don't really understand the effects of inflation in the long run. They know what is inflation and they felt it as well, but I don't think they really are aware that their fiat savings are losing its value because of high inflation. The fact that they are saving in their trusted banks, it make them felt safer, regardless of the consequences after.

But tell them to invest in bitcoin, they're always quick to judge bitcoin and even discourage people not to invest in something like bitcoin.

[Pi-network314159]

Small losses in investments vs. inflation.

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

The reason why people don't feel the loss of value in fiat is because it is unnoticeable, it is the real silent killer if you ask me. Many people really trust this old system and they keep decieving themselves that they trust the old fiat system more than the new system because of conviniency. I have a friend whom I have been begging to invest or diversify into many things but instead he chose to save in fiat, but However the money is intact in fiat and he is hoping to save it like Bitcoin without knowing that the value of that money has drastically reduced to nothing without him knowing. He only realized it when he wanted to buy something then he confirmed that the price of what he was expecting to buy cheap has devaluated by x2 of the initial amount. From then he knew that all those money he always saving are just trash and a dead currency.

[bhadz]

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue

That is because they don't worry about floating numbers with what they see on their bank accounts. But money that's kept in the bank is bound to lose its purchasing power and not the actual numbers. The rising cost of everything will make them see how it is important that those money they're keeping there have to work for itself. Otherwise, if they have significant amount of money that's enough to survive for a long time then it won't matter a lot. But, the problem of the economy right now is the potential disabling of withdrawals so, they shouldn't keep a lot of it in the bank. Because we saw it not only once but plenty of times from different banks from country to country.

but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

A saver and an investor have different risk appetites. And that's why when they see that their investment isn't doing good, they think that it's better to pull it out from that asset instead of keeping because they're afraid of losing. You get to see how mindsets are totally different from a risk taker and someone who just want to keep money stagnant but just fine of losing its purchasing power.

[trendcoin]

I recall that a few years ago, several Nobel Prizes were awarded to scientists conducting research in the field of behavioral economics. Our behavior is often not rational. While our thoughts may be focused on one thing at a given moment, they can sometimes drift to different places over time, and this is often due to forces beyond our control. Being a good investor often requires having a very strong and steadfast will...

Everyone on this forum has much better financial literacy than the average person. But how many of us have been able to prevent our psychology from being dictated by the market?

[Crypto_Timothy]

Small losses in investments vs. inflation.
I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation.

I think the frequency is what most people are afraid off, especailly when they dont really understand it. Because if i keep a load of cash in the bank and they due to inflation it reduces value unless i am not keeping track with the news to know when to redraw my money, the situation can be managed as opposed the way the markers shifts, they are so many factor that can either encourage the market or make it to fall annd that is what is making people afraid, at least thats what i think is making them afraid because i know how i misinterpreted it myself when i was still learning, so i can say that fear plays a part in how people store their money and why many still keep it in the bank. Some dont just want to trust something that is virtual and i know with time, they will adjust for sure.

[Fuso.hp]

People basically give more priority to their cash. After keeping money in the bank, they are at least sure that they have this certain amount of savings but they do not immediately think that the price of everything is increasing. That is, due to inflation, the local currency is losing value, on the contrary, the price of daily necessities is increasing. People accept this very naturally, because people need these things, and not only one person seems to realize this fact, but all the people of a country seem to realize the same thing, so these things are easy for people to accept. But when a person invests, let's say he invests in Bitcoin, after investing in Bitcoin, when he sees that the market has dumped a lot, at that time he will be worried because he has made the investment alone and he will keep thinking that the value of his investment may decrease a lot. This is mainly because maybe the investment office is financially damaged due to inflation, but they do not realize that fact.

[Ziskinberg]

But tell them to invest in bitcoin, they're always quick to judge bitcoin and even discourage people not to invest in something like bitcoin.

It's a good investment for the long term but you also have to worry about your daily income, because if you are earning less then you will barely survive. So to beat that inflation you have to keep up with it, probably by running a business that generates daily income as your prices will also adjust with inflation.

Actually those who are most affected by inflation are people who are earning a fixed income as their salaries are usually adjusted later, well I hope their bosses also consider that, because there are businessmen who are greedy, they don't think much about the welfare of their employees and just comply with the minimum required by law and what if the government is ineffective, then nothing will improve for them.

[Tamaperdana]

Small losses in investments vs. inflation.

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

In essence, many people today have very little understanding of inflation. They simply assume that as long as their money remains the same, they won't suffer any loss. In reality, its value clearly decreases, and when it's spent on goods or basic necessities, the impact is clearly felt.

Therefore, it's clear that public awareness and understanding must be built regarding this. Otherwise, they will continue to be fooled. Honestly, even in my area, I'm pretty sure only five percent of people know about inflation, and the rest have no idea at all. So, that's clearly not good. But yes, those people have been indoctrinated, and when someone explains inflation, they laugh, and yes, it can't be helped.

So, in essence, the current generation of young people must be prioritized, because young people's mindsets are still very good for critical thinking. As for why people are aware of the losses they experience in an asset, yes, it's because the percentage is visible, and their money is actually decreasing. That's why they're aware of it. Because if there is inflation, the amount of money will not decrease in the slightest, but its value will decrease.

[freedomgo]

Small losses + inflation = hyperinflation

Seriously, when there's inflation regardless if you lose or profit your purchasing power still goes down, so how much more if you are not profitable with your investment, you are just adding another problem to an existing problem. So we have to find a way to become profitable as that's one way to at least offset inflation.

In our country, inflation is already at 7.8% as of October 2026, so for me to survive, I need to earn more than that in net income after tax.

[Donk1]

Well crypto investment is still new to everyone. Even if you have experience with it, it's not something we were born with ,it's not something we spent our whole life learning. And besides it's not all cryptocurrencies / altcoins that have real long-term value and utility like Bitcoin, so when it comes down to it like the old saying people are scared of what they don't understand, and it's the truth.volatility and inflation are two different things and how we choose to approach each is up to us as an individual. As a matter of fact psychologically ,money losing value due to inflation is so widespread that it will affect the entire economy, not just you which brings down the emotional trauma because there are people you can talk to about it. But seeing your money dip in crypto gives most folks this sudden mindset of regret, especially if the coin doesn't have value or they don't know what crypto is all about until it finishes rising back to a certain ATH. So you see it's a psychological thing our brain is just not use to it that's all......

[kingstep]

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation.

The difference is simply that for the first case scenario, if an average person keeps a thousand dollar in the bank and years later sees his thousand dollar intact, he feels nothing much has happened even though by reason of inflation, the purchasing power of that money has dropped greatly.  when they look at their bitcoin in times when the market might have been doing bad ad sees that the equivalent of what they are holding is down, they tend to fret forgetting that a recovery will take them even further. you only loose as an investing when you sell and that is a key difference between holding bitcoin and holding the fiat.

[Fiatless]

People basically give more priority to their cash. After keeping money in the bank, they are at least sure that they have this certain amount of savings but they do not immediately think that the price of everything is increasing. That is, due to inflation, the local currency is losing value, on the contrary, the price of daily necessities is increasing. People accept this very naturally, because people need these things, and not only one person seems to realize this fact, but all the people of a country seem to realize the same thing, so these things are easy for people to accept. But when a person invests, let's say he invests in Bitcoin, after investing in Bitcoin, when he sees that the market has dumped a lot, at that time he will be worried because he has made the investment alone and he will keep thinking that the value of his investment may decrease a lot. This is mainly because maybe the investment office is financially damaged due to inflation, but they do not realize that fact.

Investing involves some level of risk. An investor could lose all or a high fraction of his capital of the business goals wrong. Some people prefer to keep their money in banks instead of risking it. They also don't pay attention to inflation because it reduces the value of money gradually. While growing up, my father preferred to keep money in a bank rather than buying cheap land. I know he is regretting it now because the value of that land has appreciated so much while our currency has lost almost 85% of its value over the years.

It is common for people to point to the recent hacks as the reason why it is risky to invest in Bitcoin. What is the percentage of people who lost money due to hacks in non-custodial wallets? It's very insignificant. They should take it or leave it; keeping money in banks only profits bank owners, who use it to make profits.

[crwth]

The easiest thing is that it's easy to see and understand that there are losses. You cannot control inflation, but you can control what you invest in, and that could lead to a positive or negative outcome.

To really understand the losses, I think you need to consider the investment return and what you have to pay, like interest, fees, taxes, etc.

As long as you know what you are investing in and believe in it, you can maximize your returns.

[Judith87403]

Small losses in investments vs. inflation.

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

It seems you don't understand how inflation works. The money you have in your bank account will remain the same but when you want to use the same money to purchase something that is when you will realize that it doesn't hold any value again due to inflation. The reason why the money in your bank account reduces by a small amount is because of bank charges, maintenance charges and other charges, it's not volatility that is causing it unlike when you invest in crypto and your investment start reducing due to market movements, that one is pure volatility. If you invest your money in a valuable investment such as Bitcoin, your money will be safe from inflation.

[maydna]

That is because they see the real losses there in the investment. While they keeping money in the bank will not be too worry because their government will handle it for them. They are worry with what they see but they don't realize that the inflation will come soon.
People don't worry with anything and only worry how they can fills their needs. The inflation will come whether they like or not but if the losses in the investment, that makes them very afraid and don't want to see it. That makes many people don't want to choose investment and prefer to keep money in the bank.

[Noorooo]

Small losses in investments vs. inflation.

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

Your point is correct but moreover in my opinion the biggest problem is that people focus too much on short term losses and ignore the long term impact of inflation. When they see their investments dropping by 5 to 10% they get worried but they don’t  get worried when their purchasing power decreases by even more than that because of inflation. I also think one reason for this is that when people see the amount of money in their bank accounts staying the same they feel that their money is safe and nothing is changing. They don't realize that their money is actually losing value over time because of inflation. Thats why a 10–20percent decline in their purchasing power might not bother them as much as seeing a 5 to 10percent drop in their investments. I think the most important think is to understand the risks and make smart investment decisions rather than being afraid of temporary market fluctuations.

[viljy]

Small losses in investments vs. inflation.

I have thought about this issue a lot and it is clearly evident in people's behavior that people are keeping money in the bank and the value of that money is gradually decreasing due to inflation. People do not have any tension about this issue but people get tense when they invest and after investing when they see that they are losing some amount due to temporary negative changes in the market. Yes, there may be some loss due to temporary changes in the market but that market becomes positive again, but why don't people worry about the amount of value they are permanently losing in fiat due to inflation. I think the permanent loss of inflation is much more serious than the small loss of investment.

When you invest money in assets and the next day you see that your asset has fallen in price, you are actually losing money. But when your money is simply devalued by inflation, you are not losing money in nominal terms, you are losing the purchasing power of your money.

Another important point: with an unsuccessful investment, you lose money, while your neighbor, for example, does not lose money but, on the contrary, makes a profit because he invested in another asset. This makes the situation even more unpleasant.
However, with inflation, the purchasing power of money decreases for everyone equally. Do you feel the difference? Everyone is on an equal footing. Everyone suffers from inflation equally. It’s not as hurtful as a failed investment (no one wants to feel like a fool).

[Alpha Marine]

I don't think this is a fair comparison.
First of all, the money in the bank is savings and not an investment. People are not expecting profit from it, unlike financial assets.
Also, inflation doesn't drop 5%-10% within days. It can drop 5% the whole year, and that is in a bad scenario.
But the main reason people care about the drop in the value of their asset more than the drop in the value of their savings in the bank is that they don't see their money lose value. You can literally see your Bitcoin holding drop from $100 to $95 within a day. But your $100 in the bank remains the same, expect it's purchasing power has reduced.
If they could see the value of their money reduce as inflation increases, they would care about it.

[Fuso.hp]

People basically give more priority to their cash. After keeping money in the bank, they are at least sure that they have this certain amount of savings but they do not immediately think that the price of everything is increasing. That is, due to inflation, the local currency is losing value, on the contrary, the price of daily necessities is increasing. People accept this very naturally, because people need these things, and not only one person seems to realize this fact, but all the people of a country seem to realize the same thing, so these things are easy for people to accept. But when a person invests, let's say he invests in Bitcoin, after investing in Bitcoin, when he sees that the market has dumped a lot, at that time he will be worried because he has made the investment alone and he will keep thinking that the value of his investment may decrease a lot. This is mainly because maybe the investment office is financially damaged due to inflation, but they do not realize that fact.

Investing involves some level of risk. An investor could lose all or a high fraction of his capital of the business goals wrong. Some people prefer to keep their money in banks instead of risking it. They also don't pay attention to inflation because it reduces the value of money gradually. While growing up, my father preferred to keep money in a bank rather than buying cheap land. I know he is regretting it now because the value of that land has appreciated so much while our currency has lost almost 85% of its value over the years.

It is common for people to point to the recent hacks as the reason why it is risky to invest in Bitcoin. What is the percentage of people who lost money due to hacks in non-custodial wallets? It's very insignificant. They should take it or leave it; keeping money in banks only profits bank owners, who use it to make profits.

An exchange has been hacked and hackers have stolen some money from that exchange. What does this have to do with investing in Bitcoin? This is not the first time that exchange wallets have been hacked. We have heard similar news before that popular exchanges have been hacked. Since we know that it is not safe to keep investments in exchange wallets for the long term, why didn't we be careful in that place? Keeping your investments in such wallets means putting your investments at greater risk. You have to think about keeping your investments safe and deposit your Bitcoin in wallets that are safe and ensure the security of the wallet. I think some exchange hacking or all other random incidents cannot be compared with investing.

[BitBakerr1]

When you put money in the bank and you start losing it to inflation, you won’t actually know or notice but when you invest and you are losing money, it is very easy for you to notice that you are losing.

Losing money to inflation is not actually that big as to losing money to an investment, you may put your money in the bank and actually don’t lose it to inflection. Inflation don’t happen regularly in a country, it happens regularly when there is a bad  government so when there is a good government, inflation actually don’t happen that much and your money in your bank will be safe.

Even with all these, I still believe, keeping your money in the bank is a waste, instead of keeping your money in the bank invest it, except the money in the bank is your emergency funds.