It is not as safe as we think

We all invest and save money for rainy day or retirement.

What is the risk in investment? Loosing money. You invest a $1 and if it goes to 80 cents,then you lost 20%, if it goes to 50 cents you lost half the money, you lost 50%.

If you are risk-averse person and you don't want loose even a penny, then you may go with Bank's certificate of deposit or CD OR you may invest in treasury bond.

Assume that you purchase the treasury bond which pays 4% interest,you keep it until maturity and government honors the bond and pays the money back when the bond matures.

Don't assume that this is 100% risk-free

Most common people think that investing with treasury bond is an risk-free investment.

However, there is a hidden risk involved which is inflation risk. There is greater chance of inflation risk in the near future by looking at the way governments printing and spending money,not just US government but governments all over the world.

Inflation had been a major issue with developing countries as well as developed countries such as US and Germany. Not too long ago. German-after WW-II,US- 1980's, and Zimbabwe-now.

Say for example, you invest $10,000 either in CD or treasury bond and you get the money back with approx $15,000 after 10 years.

What happens if the $15,000 don't have any value after 10 years.

If you have been thinking about treasury bond or your bank Certificate of Deposit (CD) is risk free, think again and choose something that can protect you against inflation risk.

It doesn't matter, whether you are saving or investing, there is a risk attached to it always!