Your salary went up 2% this year. Inflation ran 1.5%. You did not get a 2% raise — you got a 0.5% raise, and you will spend the other 1.5% without ever seeing it leave.
This is the first thing to internalise, because every other decision in this academy sits on top of it. Money is not a number. It is a claim on things, and the number of things it claims changes every year.
Nominal Versus Real
The nominal number is what the bank statement says. The real number is what it buys. Only one of them feeds you.
CHF 100,000 sitting in a Swiss savings account at 0.5% becomes CHF 100,500 after a year. That is the nominal return. If prices rose 1.5% over the same year, the things that cost CHF 100,000 in January now cost CHF 101,500. You are down CHF 1,000 in real terms while the statement shows a gain. The account did exactly what it promised and still made you poorer.
Switzerland Is Not Immune, It Is Just Quieter
Swiss inflation is famously low — often under 1%, occasionally negative. That has trained a generation to treat cash as safe. Over one year, it nearly is. Over thirty, it is not.
At 1% inflation, CHF 100,000 held as cash has the purchasing power of about CHF 74,000 after thirty years. Nothing dramatic happens on any given day. You simply arrive at retirement holding three quarters of what you thought you saved. Low inflation does not remove the tax on cash — it just collects it slowly enough that nobody protests.
And low is a recent habit, not a law. Swiss inflation touched 2.8% in 2022 after years near zero. Sustained, that rate turns CHF 100,000 into about CHF 75,000 of purchasing power in a decade — a CHF 24,700 loss, roughly 2.6 times what 1% would have taken. You do not get to assume the quiet decades continue; you only get to notice that they might not.
The Cost You Chose Not To See
There is a second cost, and it is larger for most people: the return you did not take. Economists call it opportunity cost. Holding CHF 100,000 in cash for thirty years instead of a diversified portfolio returning, say, 5% real is not a CHF 26,000 loss. It is the difference between CHF 74,000 of purchasing power and roughly CHF 430,000.
That gap is not a reward for cleverness. It is a payment for accepting volatility — for being willing to watch the number fall and not sell.
The Catch
None of this makes cash wrong. Cash is the only asset that is guaranteed to be there on the exact day you need it, at the exact number you expect. That is worth paying for.
The rule is not "never hold cash". It is "know what each franc is for". Money you need within three to five years belongs in cash or near-cash, and the erosion is the price of certainty. Money you will not touch for decades pays a very high price for that same certainty — and gets nothing in return.
Do This
— Find your actual savings rate. Not the number you think. Log in, look at the last twelve months, and write it down. — Split your cash into two buckets on paper: money with a job in the next five years, and money without one. — For the second bucket, ask what it is earning after inflation. If the honest answer is a negative number, you have found your first decision.
This is education, not financial advice. It is general information, not a recommendation for your situation, and it does not account for your circumstances. Rules and figures change — verify before you act, and speak to a qualified professional for decisions that matter.