Part 2 - Navigating Investing (Investing is for everyone)

Investing – you don’t really have a choice

Let’s talk about inflation. Even if you don’t fully understand what it is, you’ve definitely felt it. Here are just a few ways you’ve probably experienced it, whether you knew it or not:

House prices in Ireland from the 1970s to today

Food prices over the past few decades

Rent prices in Dublin Rent prices in Dublin from 2007 to now

If you live in Ireland, these charts would show you something you already feel: everything is getting more expensive.When I moved to Ireland in 2007, a Snickers bar cost 50 cents. Today, that same bar costs €2 at your local gas station. That, my friend, is inflation.

Inflation is a tax — but only on those without assets.

Let’s revisit one of those charts. Imagine you bought a house for €14,000 in the 1940s and still owned it today. Would you feel the pain of inflation?Or imagine you owned stock in a company that sold a Snickers bar for 50 cents in 2007 and is now selling it for €2 — and your shares increased in value because of that. How would you feel about inflation then?What if you were renting out an apartment in Dublin for €500 a month 10 years ago, and today you're charging €2,000? Would inflation hurt you, or would it help you?

Do you see the pattern?If not, here it is:Inflation drives prices up over time — including the prices of assets. Investing simply means owning assets. When you own assets, you benefit from inflation. When you don’t, inflation works against you.

This is why people say inflation is a tax on the poor — not because of income, but because those without assets pay the price, while those who own assets profit from it.

Inflation isn’t random — it’s built into the system.

One of the biggest mindset shifts people need to make is understanding that inflation is not some random or unfortunate event — it is an intentional, structural part of how modern capitalist economies work. There are forces working together — both public (governments, central banks) and private (corporations, investors) — that ensure inflation continues to happen over time. This is not necessarily sinister; it is partly because we need inflation for capitalism to function.

Let’s explore these forces

Goverments

The first and clearest force is governments and their central banks.

For example, the European Central Bank’s monetary policy explicitly targets an inflation rate of around 2%. Their goal is to maintain price stability, but that stability is not defined as zero inflation — it is defined as inflation hovering around that 2% mark. (Source)

Similarly, the US Federal Reserve has a dual mandate: to maintain price stability and achieve maximum employment. Their version of price stability is also defined by a 2% inflation target over the long run. (Source)

This tells us something very important:

The most powerful central banks in the world are not trying to eliminate inflation. Instead, they actively manage and maintain a steady level of inflation. If inflation drops too low, they lower interest rates and pump money into the system to push it back up. Their worst fear is not inflation itself — it’s deflation or stagnant prices, which could slow economic growth and reduce employment.

Corporations

Corporations are structurally incentivized to raise prices over time. Their fundamental goal is to maximize shareholder value and deliver consistent profit growth. This drive contributes to inflation in several ways:

1. Rising Costs:

   When wages, energy, or raw material costs rise, companies pass those increases onto you, the consumer.

2. Wage-Price Spiral:

   As prices rise, employees demand higher wages. To pay those wages, companies increase prices further.

3. Shareholder Expectations:

   Public companies are under pressure to deliver growing profits every quarter. Raising prices is one of the fastest ways to do that.

   
   

Investors

A third and often overlooked force sustaining inflation is the investor class.

Investors require returns on their capital, and a moderate level of inflation is key to making those returns possible. Here’s how:

1. Inflation Supports Asset Growth:

When prices rise, so do corporate revenues and profits. This leads to higher stock prices and property values. Inflation also reduces the real value of cash, making equities, real estate, and other investment assets more attractive (more on this later).

2. Debt & Leverage Benefits:

Many large-scale investors, such as private equity firms and real estate developers, use debt to fund their investments. Inflation erodes the real value of debt over time, effectively reducing what they owe while asset prices rise. This dynamic transfers wealth from savers to borrowers, benefiting those who control large amounts of capital.

In short, investors rely on a system where inflation is present but managed. Without inflation, their ability to grow wealth over time would be severely hampered.

So, what have we learned so far?

✅ Inflation increases prices over time (including the price of assets).

✅ Investing means owning assets.

✅ Owning assets protects you from the effects of inflation.

✅ Inflation is not accidental; it is built into the system.

✅ Governments, corporations, and investors all benefit from inflation and work to keep it going.

Still with me? Good. Now here’s the big one, the motherload;

The problem was never the house — it was the money.

Let’s go back to our house price chart. You can see the same house increasing in price over time. But what if the house didn’t really change in value? What if the money changed?

The house is still the same — bricks, mortar, location.It’s the money that is worth less.There’s more money in circulation, chasing the same number of houses. This is why prices rise.

Here is an example  that illustrates this:

• In 2016, the average house cost in the US was  $288,400.

  In 2024, it costs $434,700.

  You need more dolllars to buy the same house.

But if you measured that house in Bitcoin:

• In 2016, it cost 664 BTC.

• In 2024, it costs 6.6 BTC.

That’s because Bitcoin has a fixed supply, while euros (and dollars) keep getting inflated. This example is a high level explanation of a topic that is infinitely more nuanced, but  the key concept is accurate .

Key take away

If your salary is in euros, and euros lose value over time, why would you keep your life savings in euros?

You wouldn’t. You’d move your money into assets — and that’s the case for investing.

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Conclusion

It doesn’t matter if you’re an engineer, a teacher, a pilot, or a stay-at-home parent — inflation will affect you whether you like it or not.

The question is not whether you should invest — the real question is:

Can you afford not to?

See you in part 3