Here are six reasons why inflation erodes cash and savings. Now, this is something I have been learning over the last ten years and thought to start getting this information published in snippets. Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Key Point: When inflation occurs, each unit of currency buys fewer goods and services. I learnt this information later in life, and it has changed my life and how I do what I do and I truly want others to understand this fundamental information and concept – when I heard it initially, I immediately understood and thought, how have I not known that? Well, the truth is I wasn’t in the right place with the right people to learn it – it was not on my radar, and my conditioning kept me where I was & then it changed when I got fed up with something! Remember: There is real truth in the phrase ‘your network is your net worth’ This decrease in purchasing power impacts cash and savings in banks in several ways: 1. Eroding Purchasing Power If the interest rate earned on cash in the bank is lower than the rate of inflation, the real value of those cash savings diminishes over time. For example, if your bank savings account earns 1% interest annually, but inflation is at 3%, your cash is effectively losing 2% of its value each year in terms of what it can buy. 2. Decreased Value Over Time In an inflationary environment, the cost of items goes up. Therefore, if you have £1,000 in the bank today and inflation is at 3% for the year, the same £1,000 will have less purchasing power after a year because prices for goods and services have, on average, increased by 3%. 3. Opportunity Cost: Cash in the bank during inflationary periods represents a missed opportunity to invest in assets that may appreciate at a rate exceeding inflation. Equities, real estate, or other investment vehicles can potentially offer returns that not only keep up with inflation but exceed it, thus growing in real terms. 4. Interest Rates and Monetary Policy: Central banks, such as the Bank of England, may raise interest rates to combat high inflation. If the increase in interest rates on savings lags behind the rise in inflation or is lower than the inflation rate, cash savings will lose purchasing power. 5. Relative Performance to Other Assets Inflation can impact various asset classes differently. While it may erode the value of cash, it can increase the nominal value of assets like property or commodities, making cash savings a less attractive option. 6. Fixed Income and Long-term Deposits: For fixed-income investments or long-term deposits with a fixed interest rate, high inflation can be particularly damaging because the real interest rate (the nominal interest rate adjusted for inflation) can become negative, which means you’re effectively losing money on your investment in terms of purchasing power. In reality, inflation devalues cash in the bank because it reduces the real spending power of that cash over time. To maintain the value of savings, it’s important to seek returns that at least match the rate of inflation. Inflation is a crucial factor for savers and investors to consider when assessing the real return on their cash and investments. I will share more on financial wealth and money – it is vitally important to understand and not in reality, information we are taught through the education system. ‘Nothing sits in isolation; everything is connected.’ Far more written to come on this subject & if you like audio, please hop across to The Conscious Leadership Podcast to hear more. There are over 200 episodes https://podfollow.com/conscious-leadership-podcast
Why Do People ‘Brown Nose’?
Why Do People ‘Brown Nose’? Delving into the Dynamics of Ingratiation ‘Brown nosing’, a colloquial term often used interchangeably with ‘bootlicking’, refers to trying to win favour or ingratiate oneself with someone, especially a superior, by being excessively complimentary or helpful.
The Art of Flattery: Why Do People “Blow Smoke”?
The Art of Flattery: Why Do People “Blow Smoke”? As you may imagine, something happened the other day where I witnessed someone blowing smoke (in my phrase) up someone a**e & I thought why do people do that?
How do we Unravel Unconscious Bias?
Unconscious Bias: How Does It Affect Us? We all like to think of ourselves as objective beings, making decisions based on logic and reason. But did you know a silent operator is influencing your choices and behaviours? Meet the unconscious bias, subtle prejudices we hold without even realising it. Man’s task is to become conscious of the contents that press upward from the unconscious. Carl Jung
Embracing the Present: Unshackling Ourselves from the Past
Embracing the Present: Unshackling Ourselves from the Past Embracing the present is a skill to learn for many of us and life is a series of moments, each building upon the last. However, our ability to thrive in the present is often shadowed by the burdens of our past. How can we find the strength to move forward, untethered by previous regrets or traumas? This article explores why and how you should unshackle yourself from the past to live a life enriched by the present. Remember: we all have a past, and our past does not have to be the prediction of our future. The choice is ours no one else
The Pros & Cons of Optimism
The Pros & Cons of Optimism Optimism is a mental attitude that interprets events and circumstances in a positive way. People who are optimistic tend to have a more positive outlook on life and are more likely to approach challenges with a sense of hope and determination.
Unlocking Effective Decision-Making: Exploring Options for Groups to Reach Consensus and Drive Results 1/4
Unlocking Effective Decision-Making: Exploring Options for Groups to Reach Consensus and Drive Results When groups of people need to come to a decision, there are several options and methods they can employ. The choice of decision-making process often depends on the nature of the decision, the size of the group, time constraints, and the level of consensus required. Relay the option below to the context you are in and remember – you can change the current process with agreement or through power – make your choice wisely it will have consequences There are 3 more articles in this series this is 1/4
Effective Decision-Making: Pros and Cons of Different Approaches for Optimal Outcomes 3/4
Effective Decision-Making: Pros and Cons of Different Approaches for Optimal Outcomes Decision making is one of the biggest things to get right, well as right as you can, in both life and business. There are processes you can follow and all have their place linked to the context There are 3 more articles in this series this 3/4
Unlocking Effective Decision-Making: Exploring Options for Groups to Reach Consensus and Drive Results 2/4
Unlocking Effective Decision-Making: Exploring Options for Groups to Reach Consensus and Drive Results When groups of people need to come to a decision, there are several options and methods they can employ. The choice of decision-making process often depends on the nature of the decision, the size of the group, time constraints, and the level of consensus required. Relay the option below to the context you are in and remember – you can change the current process with an agreement or through power – make your choice wisely it will have consequences There are 3 more articles in this series. This is 1/4
Saying Yes and Meaning It, Saying No and Meaning It: The Psychology and Rewards of Knowing the Difference
Making decisions, as in saying yes or no and meaning it, which relate to both intra and interpersonal communication, can be challenging for some and easy for others. It is a skill set that all can learn 100%. Now whether you want to or not is a whole other ‘thing’. Learning it will probably involve change! Some will say there is a balance between saying “yes” and “no”. Which I can accept if you fall too heavily one way or the other. I bet you have met that person that whatever you suggest their automatic response in no! and I am not a gambler and I bet you have also met the person that says yes to everything, resulting in them supposedly being in 3 places simultaneously! Each response carries its own set of implications, and striking the perfect balance is a skill crucial for emotional and mental health. The psychology behind saying “yes” and “no” is immense and far more than one article will cover (I will write more on the subject) Remember: Each use of either yes or no, regardless of reason, brings rewards to the issuer Saying Yes and Meaning It When we say “yes” and mean it, we are opening ourselves up to: Experiences, Relationships, Opportunities Personal growth and Happiness. Saying “yes” is an act of acceptance – it signifies a willingness to participate, to be involved, and to make connections and that can foster magic or mayhem Psychologically, it can manifest as an act of agreeableness and open-mindedness, both of which are integral personality traits that promote positive social interactions. The Physiological Perspective From a psychological perspective, saying “yes” and meaning it can trigger a release of hormones such as dopamine and oxytocin. These hormones generate feelings of happiness, pleasure, and bonding. They help us connect better with others and feel more optimistic about life. Dopamine, the ‘feel good’ hormone, is associated with the reward system in our brain. We feel happy and satisfied when we say “yes” to something we truly want to do or experience. Remember: saying “yes” should be a conscious and mindful decision, not a compulsive reaction to external pressure or fear upsetting someone. The inability to say “no” out of fear of rejection or conflict can lead to an unhealthy pattern of behaviour, often characterised by overcommitment, low self-esteem and burnout. Saying No and Meaning It The power to say “no” and mean it is equally important. Saying no is a crucial aspect of maintaining personal boundaries and ensuring mental well-being. Saying “no” is essentially an act of self-care – it involves setting limits, preserving energy and prioritising one’s own needs. The ability to say “no” corresponds to the psychological concept of assertiveness, which is the ability to express oneself and one’s rights without violating the rights of others. Being assertive means having the courage to express your feelings and standing up for one’s point of view, while also respecting the feelings and beliefs of others. Psychologically, saying “no” and meaning it opens us up to: Maintaining self-esteem Reduces stress. Avoiding situations and tasks that are undesirable, Stopping others from being overbearing or harmful. Remember: saying “no” should be a conscious and mindful decision with all the decision-making information in mind, not a knee-jerk reaction for attention. By saying “no” to such situations, you are, in effect, saying “yes” to your mental and emotional well-being. Furthermore, the ability to say “no” can be associated with the development of resilience and the promotion of autonomy. Say NO to others and YES to yourself and the opposites for the right reasons. Like saying “yes,” saying “no” also requires balance. Constantly declining opportunities or isolating oneself can lead to missed experiences and potential social disconnection. The Rewards of Balance Finding the right balance between saying “yes” and “no” and meaning it is an art. It requires self-awareness, an understanding of your own values and motivators, and the courage to express yourself. It requires confidence, decision-making skills, information-gathering skills, a deep connection with your intuition and above all, knowing your worth and value for self and others. Saying “yes” or “no” extends beyond verbal communication. It reflects your psychological state and ability to balance your needs and wants with those of others. By harnessing the power of “yes” and “no” and using them mindfully and assertively, you unlock the potential to lead more fulfilling, balanced, and healthier lives. If you like what you read in the articles, you may like to read one of Julies books on and on or listen in to Please subscribe and follow more books being written and episodes being produced 🙂