Inflation
The gradual rise in prices that means the same money buys less over time.
Money does not lose value visibly. Prices rise instead, which amounts to the same thing.
It compounds. A few percent a year sounds trivial and is not: over thirty years it can halve or worse what a given sum buys, with no single moment where anything went wrong.
This is why cash is the wrong home for money you will not touch for decades, and why it is exactly right for money you need soon. The erosion is slow enough to be irrelevant over three years and decisive over thirty.
It also means any return should be judged after inflation. A 7% return with 3% inflation is closer to 4% of real gain — see real return.
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