Don’t save in government currency
If the euro, the dollar or any fiat currency keeps losing purchasing power, the conclusion is simple: keeping your savings in it is not saving, it is losing wealth in slow motion.
It is arithmetic. If prices rise 4% a year and your account pays 1%, you lose 3% of purchasing power every year, without doing anything and without anyone visibly taking anything from you.
The solution is to save in something that keeps or increases its purchasing power. The most conservative option is to go back to the money of old: gold and silver, what the market chose for centuries before governments replaced it with paper. The Spanish minimum wage bought 17.75 grams of gold a month in 2020 and 10.12 in August 2026. Whoever kept their savings in gold in 2020 can buy more today than then; whoever kept them in euros, less.
If you also want your wealth to grow, you need to go a step further: save in goods that appreciate over time, companies that produce, scarce commodities, digital assets with monetary properties. That is investing. It is not speculating or gambling: it is choosing as your unit of saving a good that appreciates instead of one that depreciates.
Compound interest
When you invest, your money earns a return. If you reinvest it, that return earns more return, and so on. That is compound interest.
The formula is FV = C × (1 + r)^t, where FV is the final value, C what you invest, r the annual return and t the years.
What makes it special is the t, which sits in the exponent. Time does not add, it raises. At 10% a year, an investment is not worth twice as much after 10 years, it is worth 2.59 times as much; after 20, 6.73 times; after 30, 17.45 times.
That is why what matters most is not how much you put in, but when you start. Ten euros invested today at 10% a year would be 1,173.91 euros in 50 years. Consumption has a cost almost nobody works out: what that money would have become.
The cheap wine story
When I was 18 I did what almost everyone does: went out at weekends with friends and spent what little I had. The difference is that they ordered branded drinks at 10 euros and I drank boxed wine.
At first they made fun of me. But I took the 8 euros I saved each weekend and invested them. It was not much: 416 euros a year.
What did I lose by drinking cheap wine? Nothing that mattered. I was with my friends, I laughed and had just as good a time. And in exchange I was building something.
To see it in numbers: 8 euros a week, at an assumed return of 7% a year, becomes 6,018.96 euros after 10 years, having put in 4,160. After 40 years, 91,601.49, having put in 16,640. It is an assumption to show the mechanism, not a promise: the real return changes every year. What does not change is that, after 40 years, the drinks are worth nothing.
This applies to almost any expense. A 1,000 euro phone when a 300 one does the same? A new car when a second-hand one gets you to work just as well? I am not telling you not to spend on anything. I am telling you to tell apart what truly makes you happier from consumption to show off or to follow a fashion. If you have a passion that improves your life, spend on it without guilt. Cut the rest and start building your capital, even if it is 8 euros a week.
Next: Module 5. Shares. Course contents.