The Risk of Not Investing

Doing nothing feels like the safe choice, but it carries a real, quiet risk of its own: inflation, the gradual rise in prices over time. Cash that sits still doesn't stay still in value — as prices rise around it, the same pile of money buys a little less every year, even though the number in the account never goes down.

A simple example makes this concrete: at a typical historical inflation rate, something that costs $100 today can cost roughly $180 in 20 years. If $100 sits in cash the entire time, it still says $100 — but it now buys noticeably less than it used to. That gap between the number and what it can actually buy is the real cost of not investing.

Today:      $100 buys a cart of groceries
In 20 years: that same $100 buys about half a cart
(assuming prices keep rising, as they historically have)

The gradual rise in prices over time, which quietly reduces what a fixed amount of cash can buy, is called ____.

There's a second cost to not investing, separate from inflation: opportunity cost, the growth you miss out on simply by waiting. Every year money sits uninvested is a year it wasn't compounding — and as the next lesson shows, those early years matter disproportionately, because they're the ones with the most time left to grow.

What actually happens to $1,000 in cash sitting untouched for 20 years, assuming normal inflation?

"Doing nothing" with your money is actually risk-free.