There is a question very few people ask themselves until it is too late: how much is what your money was worth ten years ago worth today? The answer, in most cases, is that it is worth considerably less. Not because you have spent it, but because inflation has eroded it in silence.
Inflation does not appear on your bank statement as a fee. There is no notice. The money is still there, with the same digits on the screen, but it buys less. A little less every year. Over a decade, the difference can be brutal.
"The greatest risk to wealth is not losing it all at once. It is watching it shrink slowly, without noticing."
What inflation does exactly to your money
With average inflation of 3% a year, a moderate figure, not an exceptional one, €100,000 today is equivalent to a little over €74,000 in ten years in terms of purchasing power. With inflation of 5%, that figure falls below €61,000.
Money in a current account does not generate enough return to offset that loss. Fixed-term deposits, at best, only partially cover inflation. Treasury bills and money-market funds can help in specific cycles, but none of them has preserved the value of wealth consistently over decades.
| Initial capital | Annual inflation | Real value at 10 years | Loss of value |
|---|---|---|---|
| €100,000 | 2% | €81,707 | -€18,293 |
| €100,000 | 3% | €74,409 | -€25,591 |
| €100,000 | 5% | €61,391 | -€38,609 |
| €100,000 | 7% | €50,835 | -€49,165 |
Why gold has endured for 5,000 years
Gold is not an investment fad. It is the oldest and most consistent store of value in human history. Entire civilisations have trusted it, and all those that tried to do without it, replacing it with unbacked paper money, ended up paying a very high price.
The reason is simple: gold cannot be manufactured, printed or created out of nothing. Its supply is limited and its extraction is costly. When governments print money to finance debt or public spending, as has happened on a massive scale after the pandemic, the value of money falls. That of gold does not.
Over the past 20 years, gold has multiplied its price by more than eight. Not because it is a speculative asset, but because money has lost value and gold has reflected it with precision.
Physical gold versus other assets
It is worth distinguishing physical gold, investment bars and coins, from other financial products linked to gold: gold ETFs, futures, certificates. The latter have a fundamental problem: they are promises. They are papers stating that someone holds gold somewhere. In moments of systemic crisis, precisely when you need protection most, those promises may not be honoured.
Physical gold has no counterparty. It does not depend on any bank, any government, any financial system. It is real metal, yours, which exists regardless of what happens in the markets. That is its main strength, and the reason why large fortunes have always kept a share of their wealth in physical metals.
"Physical gold has no counterparty. It is not a promise; it is real metal that exists regardless of what happens in the markets."
Investment gold and its tax advantage in Spain
In Spain, investment gold, bars with a minimum purity of 99.5% and recognised minted coins, is exempt from VAT. This advantage, which does not exist for silver or for jewellery, makes the cost of entry significantly lower than in other tangible assets.
Taxation arises only at the moment of sale, as a capital gain under personal income tax (IRPF). While the gold remains in your possession, it generates no additional tax obligation.
Protecting wealth is not only for large fortunes
For decades, investing in physical gold was associated with large capital, one-kilo bars, private vaults, six-figure transactions. That perception has changed radically. Today it is possible to build a position in physical gold gradually and systematically, tailored to any wealth profile.
The key lies in periodic accumulation: buying at regular intervals regardless of the price at the time. This strategy, known as Dollar Cost Averaging, eliminates the risk of entering at a bad moment and allows a position to be built over the long term with discipline and without stress.
Protecting wealth from inflation does not require a large initial fortune. It requires judgement, consistency and the right advice to choose the correct format, the appropriate custody and the strategy that best fits each situation.
How to start
The first step is always the same: understanding what portion of your wealth makes sense to allocate to physical metals based on your time horizon, tax situation and personal objectives. There is no universal answer; there is an answer for each case.
At Equus Capital we advise on the purchase of physical gold and silver, the selection of format and product according to profile, secure custody through Loomis España, a subsidiary of Loomis AB, a Swedish company with more than 160 years of history, and a long-term accumulation strategy. No financial products, no unnecessary intermediaries. Only real metal.