I want to start with something most people do not notice.
Open your banking app. Look at the balance in your savings account.
Is the number bigger than it was a year ago?
If it is, there is a very natural feeling that comes with it.
Good. I am saving. I am being responsible. The money is growing.
I know that feeling because I have had it too.
Then I started asking a slightly different question.
What can this number actually buy compared with what it could buy a year ago?
That question changes the picture.
The balance can go up while the purchasing power of the balance goes down. One is visible on the screen. The other is happening somewhere in the background, without a notification, without a red number and without a transaction in your account.
That is what makes inflation so strange.
The loss you never see
Imagine putting €10,000 in a drawer and forgetting about it for years.
Nothing dramatic happens. Nobody steals it. You do not spend it. The number remains €10,000.
It is very easy to look at that and say: I still have my €10,000.
Technically, that is true.
But money only has meaning because of what it can do. The €10,000 is not valuable simply because the number says €10,000. It is valuable because it can buy a certain amount of food, housing, travel, services, time and everything else that sits inside a life.
If those things become more expensive while the €10,000 stays where it is, the number has survived. The purchasing power has not.
The money is still there.
The wealth is not.
That sentence is probably the simplest way I know to explain inflation.
My mother's €50,000
I have seen this in my own family.
My mother once sold an apartment and put roughly €50,000 in the bank. The reason was understandable. She wanted safety. She wanted the money available. She did not want to take unnecessary risk with something she had worked hard to accumulate.
At one point she told me the bank was paying around 3% interest.
She was earning money.
That was how it felt.
Then I asked what the apartment she had sold was worth by then.
It was around €75,000.
Her savings had grown to roughly €57,000.
There are a lot of things you can say about property prices, and this is not an argument that everyone should own property. The point is simpler.
She had done what many people are told is the safe thing. The number in the bank had gone up. Yet the asset she had sold had moved much faster.
She had not watched €50,000 disappear.
There was no crash. No fraud. No terrible investment statement arriving in the post.
She had simply fallen behind.
That was the moment inflation stopped being a percentage to me. It became a story about a real person and a real decision.
Why inflation does not feel like a loss
I think this is where the psychology matters.
We are very good at noticing events.
We are much worse at noticing processes.
If €10,000 disappeared from your account tomorrow, you would notice. You would probably call the bank. You would feel the loss immediately.
If your purchasing power declines a little bit every year, there is nothing to call anyone about.
Your account still says €10,000.
The supermarket does not send you a message saying: your money bought 3% less this year.
Your bank does not show a little warning underneath the balance saying: nominal value unchanged, real value declining.
The loss is spread so thinly across thousands of prices that your brain barely registers it.
A little more for the weekly shop. A little more for energy. A little more for rent. A little more for insurance. Then another year passes.
None of those individual increases feels like the event.
There is no event.
There is only accumulation.
The savings account can create the wrong feeling
This is why I am careful when people say, “At least my money is safe in the bank.”
Safe from what?
If you mean safe from a stock-market crash, yes. A savings account does not behave like an equity portfolio.
If you mean safe from losing purchasing power over a long period, that is a different question.
If your interest rate is below inflation, you are losing purchasing power in real terms. The balance can still rise. You can still receive interest. You can still feel like you are making progress.
That is the uncomfortable part.
Saving is not automatically the same thing as preserving wealth.
Sometimes you are simply preserving the number.
The money under the mattress is not really the problem
It is easy to laugh at the person who keeps cash under the mattress.
But I think that misses the point.
The mattress is just the obvious version.
The more interesting version is the person with a perfectly respectable bank account, a regular salary, a growing savings balance and a long-term goal.
They are doing everything that feels responsible.
They just never ask what the money needs to earn to keep up with the world around it.
That was one of the things I wish somebody had explained to me much earlier.
There is a difference between keeping money available and keeping money productive.
You need both.
Cash still has a job
This does not mean I think everyone should take their savings and put them into the stock market.
That would be a ridiculous conclusion.
Cash has a job.
Your emergency fund should be accessible. Money you know you will need soon should not be exposed to the same uncertainty as money you will not need for many years.
I think of an emergency fund as insurance.
You do not buy insurance because you expect it to outperform the market. You buy it because you want the ability to absorb a bad month without turning a temporary problem into a permanent financial decision.
The question is what happens to the money beyond that.
If it is long-term money, sitting for ten or twenty years while earning less than inflation, then “doing nothing” is not actually doing nothing.
It is a decision.
What changed for me
Once I understood this, I stopped thinking about savings as one big category.
Some money needs to be liquid.
Some money needs to be protected.
Some money needs to grow.
The mistake is expecting one account to do all three jobs.
I also became much more interested in the gap between nominal and real returns. Not because I wanted to become obsessed with percentages, but because I wanted the number on the screen to mean something.
If I see €100,000 in an account twenty years from now, I want to know what that €100,000 can actually do.
That is the number that matters.
From the Journal to your own numbers
This is where I move from the Journal to the practical side of what I do.
Here on Mike Petry Journal, I write about the stories and psychological mistakes behind our financial decisions.
On NobodyToldMike.com, I take those ideas and turn them into practical tools and decisions.
I also break down these ideas visually on the NobodyToldMike YouTube channel. I recently made a visual explanation of inflation and the difference between the number you save and the wealth that number represents. You can watch it here.
If you want to see your own financial position rather than mine, the NobodyToldMike Portfolio Tracker is there for that.
The financial freedom app I am building is another step in the same direction. The idea is simple: stop talking about money only in percentages and start looking at what your own numbers mean across time. If you want early access when it launches, the Sunday newsletter is the place to hear about it.
The real cost of standing still
Inflation is often described as rising prices.
That is correct, but it is not how I experience it anymore.
I think about it as a race between the money I have and the world that money has to operate in.
If my money grows more slowly than the cost of the life it is supposed to fund, I am not really moving forward.
I may have more euros.
I may even feel richer.
But I have less purchasing power.
That distinction matters enormously over twenty or thirty years.
Saving is still important. Cash is still important. Safety is still important.
But long-term wealth needs something more than a number that goes up.
It needs purchasing power.
It needs time.
It needs a system.
Because the most dangerous financial loss is not always the one you can see.
Sometimes it is the one where you open your banking app, see a bigger number, feel responsible, and never realise that the world around that number has quietly moved on.
The money is still there.
The wealth is not.