Money in a savings account is safe, but over decades its buying power shrinks with inflation. Investing for long-term goals like retirement aims to grow money faster than inflation, in exchange for accepting ups and downs along the way.
Three ideas to know
- Inflation: prices tend to rise over time, so the same dollars buy less
- Compounding: growth on top of earlier growth, which matters more the longer money is invested
- Risk and return: investments that can grow more usually also swing more, and can lose money
Why time matters
Starting earlier gives compounding more years to work. Even small, regular amounts can add up over decades. Our growth calculator shows how, using assumptions you choose.
General education only. All investing involves risk, including loss of principal. Nickel Gains isn't paid by any broker, fund company or adviser.