The Invisible Thief: How Inflation is Eating Your Euro Savings

I remember watching my mother manage her money when I was growing up. She was very good at saving, like my grandmother. She had this old-school discipline of putting money aside every single month, no matter what. To her, the bank was a fortress. It was the safest place on earth. If the money was in the bank, it was safe.

But as I got older and started looking at the numbers, I realized something heartbreaking. My mother wasn’t actually "saving" money in the way she thought she was. She was storing it in a place where it was slowly losing its power. She had the same amount of Euros, but those Euros could buy fewer groceries, fewer bus tickets, and fewer gifts for the family every passing year.

She was being robbed by the Invisible Thief, also known as inflation. And if you are living in Europe today, there is a high chance the same thing is happening to you.

The Bread Analogy: Why Your Kitchen Drawer is a Financial Trap

In my book, I use a simple analogy to explain this because I think we overcomplicate finance on purpose to make it sound "expert."

Imagine you take a fresh loaf of bread today and put it in a kitchen drawer. You lock that drawer and come back five years from now. When you open it, what do you see? You still have the loaf. It’s physically there. But it has changed. It’s hard, it’s moldy, and you can’t eat it anymore. It has lost its "utility."

Your savings account is that kitchen drawer. If you put €10,000 into a traditional bank account in Germany, UK, or Spain today, and you check your balance in ten years, the screen will still say "€10,000" (plus a few cents of interest that won't even buy you a coffee). But when you walk into a store with that money, you will feel the rot.

The prices of everything—rent, electricity, a liter of milk—will have climbed higher while your money stayed still. In fact, the average inflation percentage per year in the Euro zone is between 2.2 and 3%, which means that after 10 years, taking compounding into account, everything has increased on average between 24 and 34% of its original price. Which means that you would have less of that 10,000€ to buy the same things.

The Brutal Math of 0.1% Interest

Let’s look at the actual reality of a typical European saver. Most of the big "street" banks are still incredibly stingy. They might offer you 0.01% or 0.1% interest. They act like they are doing you a favor, but let’s do the math that they don't want you to do.

If you have €10,000 in a "safe" account at 0.1% interest: After one year, the bank gives you €10. You now have €10,010.

However, the European Central Bank (ECB) generally aims for an inflation target of 2%. In recent years, we’ve seen it spike much higher than that, sometimes hitting 8% or 10% in certain countries. Even if we use a conservative average of 3%, the cost of living has gone up by €300.

So, while your bank balance went up by €10, your "buying power" went down by €300. You are effectively €290 poorer than you were last year, even though you did everything "right" by saving.

Why Banks Love Your Fear

Why do banks keep interest rates so low for us? Because your fear is their profit.

When you leave your money in a savings account, the bank doesn’t just let it sit there. They take your €10,000 and lend it out to someone else for a mortgage at 4% or a credit card at 15%. They are "Being Their Own Bank" using your money. They keep the massive difference and give you a tiny crumb of interest to keep you quiet.

They rely on the fact that most people are too afraid of the stock market to move their money. They want you to believe that the "safest" thing you can do is keep your cash with them. But as we just saw, that "safety" is actually a guaranteed loss of roughly 3% of your wealth every single year.

The BYOB Solution: Taking the Bread Out of the Drawer

To break this cycle, you have to stop thinking like a "saver" and start thinking like a "banker."

A banker knows that cash is a melting ice cube. If you hold it too long, it disappears. To protect your wealth in Europe, you need a two-step strategy to fight back against the Invisible Thief.

1. Use the "New" Banks for Your Cash 

You don't have to accept 0.1%. Modern neobrokers like Trade Republic have started passing the ECB interest rates directly to users. If you can get 2 to 4% on your cash, you are finally standing still. You aren't getting rich, but you are at least neutralizing the thief. This is where your emergency fund should live. That’s in fact where I have most of my emergency fund. In case you want to create an account with Trade Republic, you can use my referral link and you and I can win up to 500 € in stocks as of 2026.

2. Assets Over Cash 

For any money you don't need in the next five years, you have to own things that grow. This means diversified ETFs (Exchange Traded Funds) that track the global economy. When the price of bread goes up, the profits of the companies that make and transport that bread also tend to go up. By owning the companies, you are on the right side of the inflation equation.

Depending on the risk you plan to take you can also have other types of investments. If you’re curious about some examples of portfolio you can check these posts (10000€ portfolio in the EU, best ETF Brokers in the EU) or read my book (almost finished), which will be free for my subscribers in the first week when it’s out.

Final Thought

The biggest risk you can take is taking no risk at all. Inflation is the only "guaranteed" loss in the financial world. Every day you leave your excess cash in a traditional, low-interest account, the Invisible Thief is taking a small bite out of your future.

It’s time to unlock the drawer, take your money out, and put it to work. Financial freedom doesn't come from how much you work for money; it comes from how much your money works for you.

Be Your Own Bank!