Why You Should Take the Vital Step from Saving to Investing

Welcome to Financial Fluency - your weekly guide to mastering financial English, learning how money works, and making confident financial choices.

In this issue:

• A Look at the Markets: Performance July 2025

• Why You Should Take the Vital Step from Saving to Investing

• Quote of the Day: Vladimir Lenin

• We value your feedback

• Word of the Day: Debauch

• Test Your Knowledge: Interactive Quiz

• Whenever you are ready, here is how I can help you

A Look at the Markets: Performance July 2025

Vanguard FTSE All-Word ETF (Accumulating)

In July, the Vanguard FTSE All-World ETF had a positive month, enjoying a gain of about 5.1%.

iShares Core S&P 500 UCITS ETF (Accumulating)

Likewise, the iShares Core S&P 500 ETF did even better, showing an impressive gain of almost 6.45%!

Vanguard EUR Corporate Bond ETF (Accumulating)

As we expect, a steady performance for the Vanguard EUR Corporate Bond ETF, with a return of 0.4%.

Bitcoin Monthly Performance $BTC.X ( ▲ 2.68% ) 

Bitcoin saw a positive boost of about 8.1% in July!

Why You Should Take the Vital Step from Saving to Investing

The shift from 'saving for retirement' to 'investing for retirement'

Last week, we explored why saving has become increasingly difficult for many people due to rising costs of housing, utilities, and other essentials relative to wages. Before we move forward, I wanted to acknowledge this reality whilst addressing a crucial next step: understanding why investing, in my opinion, has moved from optional to essential in today's financial landscape.

When Retirement Was Simple

My mother took early retirement from her primary school teaching career at the age of 55.

She lived comfortably throughout her retirement, never spending more than she was earning, relying on her teacher's pension and savings to fund a peaceful lifestyle. Her approach was straightforward: work, save a reasonable amount, and trust that her pension would provide the foundation for retirement. This wasn't unusual for her generation.

Those days, I believe, are over.

The Pension Reality Check

I do not think you can rely on pensions alone to fund your retirement in today's world.

People are living longer, which is wonderful news, but it creates enormous pressure on governments to provide pensions, healthcare, and social care for growing elderly populations across Western countries. State pensions are being stretched thin, whilst workplace pension contributions often fall short of what's needed for a comfortable retirement. Many pension schemes have shifted from defined benefit (guaranteed income) to defined contribution (investment risk on you), transferring both the responsibility and risk directly to individuals.

The mathematics simply don't work like they did for my mother's generation.

The Currency Challenge

Even more concerning is the systematic debasement of currency that's been accelerating since the 2008 financial crisis.

Government debt as a proportion of GDP continues rising in many countries, and how do governments manage this burden? As Lenin once observed, "The best way to destroy the capitalist system is to debauch the currency." When governments deliberately reduce the value of money, they quietly transfer wealth from savers to debtors—including themselves. Raoul Pal, founder of Real Vision and former Goldman Sachs executive, describes this as "systematic fiat currency debasement" caused by central banks monetising growing debts.

Based on Federal Reserve data, the US money supply has nearly tripled since 2008, while global money supply has grown from an estimated $37 trillion to over $108 trillion today. This means a dollar in 2008 has the equivalent of just 35 cents in money supply terms today—a 65% loss of purchasing power through currency debasement alone.

Traditional savings accounts simply cannot keep pace with this debasement, which has been running at 8-10% annually in recent years—far exceeding official inflation figures.

The Investment Imperative

This brings us to an uncomfortable truth: you now need to invest just to maintain your purchasing power.

What my parents called "saving for retirement" has evolved into "investing for retirement" by necessity, not choice. Raoul Pal's analysis shows that only certain assets—particularly technology stocks and high-quality cryptocurrencies—have consistently outperformed currency debasement over the long term. Even traditional "safe" investments like bonds and property often fail to keep pace with the real rate of currency depreciation.

The Time Investment

The reality is that you likely spend approximately 40 hours a week earning money—you should spend a few hours a month protecting it from government monetary policy!

Think of currency debasement as a hidden tax.

As always, none of this is financial advice. Everyone should invest according to their personal circumstances, risk tolerance and financial goals.

Quote of the Day: Vladimir Lenin

Whether intentional or not, this dynamic appears to be unfolding across many developed economies today.

We Value Your Feedback!

Your opinion helps us improve and lets you suggest topics or ask Business English questions for future issues.

Word of the Day: Debauch

Debauch - verb - to corrupt, degrade, or reduce the quality or value of something; in financial contexts, to systematically reduce the value of currency through excessive money creation.

Context and Usage: Debauch is not commonly used in everyday English, and you don't need to memorise it for practical use. I included this term specifically because it's the exact word Lenin used in his famous quote, and changing it would alter the historical accuracy. In future Financial Fluency newsletters, we'll use the more common term "debase" when discussing currency value reduction.

Note: While "debase" is the standard modern term for reducing currency value, Lenin's choice of "debauch" was deliberate—it implies moral corruption of the monetary system, suggesting this practice undermines the foundation of economic trust between citizens and government.

Common Collocations:

Debauch the currency - systematically reduce the value of money. Central banks risk debauching the currency when they print money excessively to fund government spending.

Debauched monetary policy - policies that deliberately weaken currency value. Critics argued that quantitative easing represented debauched monetary policy that punished savers.

Debauchery of the monetary system - systematic corruption of sound money principles. The continuous money printing since 2008 represents what some economists call the debauchery of the monetary system.

Business Example: The company's shareholders worried that management was debauching the brand's reputation through cost-cutting measures that compromised quality.

Test your knowledge: Interactive Quiz

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Disclaimer:

This newsletter is for informational and educational purposes only and should not be construed as financial advice. The information contained herein is generic and does not take into account your individual financial circumstances. You should always consult with a qualified financial professional before making any investment or financial decisions.

Additionally, the authors and/or publishers of this newsletter may hold investments in securities or other financial instruments mentioned herein. These are included for illustrative purposes only and should not be taken as a recommendation to buy or sell such securities or financial instruments.