Why Keeping Money Idle is Costly

August 13, 2025 2 min read

When money is left idle, either in a savings account or at home in cash, it slowly loses its value over time. For example, if you have ₹100 today and do nothing with it for 10 years, inflation will reduce its worth to about ₹64 (see the image below).

This means ₹36 simply disappears in terms of purchasing power. Many people underestimate this hidden loss, but it can have a big impact on long-term wealth.

The Power of Simple Investing

Instead of letting money lose value, even the simplest form of investing can make a huge difference. For instance, if ₹100 is invested in a basic index like the Nifty, it could grow to ₹311 in 10 years without considering inflation. When adjusted for inflation, the real value would be around ₹200. That is still a 100% gain compared to doing nothing, which is far better than losing 36% of your money’s worth.

Why Beating Inflation Matters

Inflation silently eats away at the value of money. If your savings are not growing faster than inflation, you are effectively getting poorer each year. The first step in wealth building is to make sure your money is earning more than the inflation rate. Index investing, mutual funds, or other diversified investment options can help you achieve this goal.

Aiming Beyond the Basics

While index investing is a great start, there are ways to aim higher. By trying to beat not just inflation but also market benchmarks like the Nifty, you can potentially grow your wealth faster. This can be done through careful selection of funds, long-term strategies, and disciplined investing. The key is to keep your money actively working for you.

The Simple Rule for Wealth Growth

The lesson is clear — do not let your money sit idle. Even small, consistent investments can make a huge difference over a decade. Whether you choose index funds or other options, the important thing is to start and stay invested. Money that works for you will not only keep up with inflation but can also multiply over time, securing your financial future.

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    Why Keeping Money Idle is Costly