Final answer:
The statement `According to Rose Han, not investing at all is not a good idea because inflation reduces the value of your cash` is TRUE.
The answer is option ⇒ a) True
Step-by-step explanation:
Investing is generally considered a good idea because it allows you to potentially earn a return on your money. One of the reasons not investing at all is not a good idea is because of the impact of inflation.
Inflation refers to the gradual increase in the prices of goods and services over time. When inflation occurs, the purchasing power of your money decreases. This means that the same amount of money can buy fewer goods or services in the future compared to the present.
If you simply hold onto your cash without investing it, the value of your money will erode over time due to inflation. For example, let's say you have $1,000 in a savings account that earns no interest. If the inflation rate is 2% per year, the purchasing power of your $1,000 will decrease by 2% annually. After one year, your $1,000 would only have the purchasing power of $980.
Investing your money allows you to potentially earn a return that can outpace the rate of inflation. By investing in assets such as stocks, bonds, or real estate, you have the opportunity to grow your wealth and mitigate the impact of inflation on your purchasing power.
In summary, not investing at all is not a good idea because inflation reduces the value of your cash over time. By investing, you have the potential to earn a return that can outpace inflation and preserve or increase the purchasing power of your money.
The answer is option ⇒ a) True