Charles Darwin shows why shares are the natural selection for investors

So farewell Charles Darwin, who is finally disappearing from the nation's £10 pound notes after almost 18 years, to be replaced by Jane Austen. That's evolution for you.

Money business

During his stint on the nation's tenners, the great naturalist, geologist and biologist has passed on a lesson almost as valuable as the one about humans once swinging through the trees. He has taught us about the descent of money, once it is subject to the power of inflation.

Darwin's tenner ceased to be legal tender from Thursday but its value has been steadily eroding for years. Thanks to inflation, it is now worth a third less then when originally printed in November 2000. If you had put one of these notes in a piggy bank earning zero interest, its spending power would be equivalent to just £6.17 in today's money, according to research from fund manager M&G.

Evolving backwards

"Let the strongest live and the weakest die," Darwin said, and this applies to both piggy banks and cash. Anyone who saved their tenner in the average savings account would have seen it evolve into £11.78, although in real terms its purchasing power is worth just £7.27 today. With inflation at 3% a year, the value of the new Jane Austen £10 note looks set to erode even faster.

The stock market can be a brutal place, red in tooth and claw, and should be avoided if you need your money back within the next few years. However, it also shows far superior biological adaptation, which means that over longer periods such as five, 10, 15, 20 or 30 years it rips cash to shreds. The FTSE All-Share would have turned your tenner into £24.31 since 2000, equivalent to £14.90 in real terms. The FTSE 100 offers a stunning growth opportunity today.

Non-adaptive cash

Separate figures from Newton Investment Management show the impact when investing large sums of money. If you had left £10,000 in cash, it would be worth £10,800 today. Invested in a global spread of bonds, it would have grown to £25,010 in nominal terms.

Stocks and shares are king of the jungle, with a broad basket of equities turning your £10,000 into £25,344. That's a real rate of return of 83% over the period. Reinvesting your dividends for growth really helps investors thrive.

Individual stocks can do even better. For example, if you had invested your £10,000 into Apple Inc 18 years ago, one year before it released the first iPod, it would now be worth a super-charged $546,800, according to figures from Martin Currie.

Only natural

The same applies if you are investing regular monthly sums. If you had put aside one of Darwin's tenners every month since November 2000, cash would have turned the return into £2,142, bonds into £3,133, and a basket of stocks and shares into £4,625, more than double the return from a savings account. However you add it up, stocks and shares win hands down.

With wages rising at just 2.5% a year and inflation at 3%, Britons are struggling to evolve financially. If they have money in the stock market, they are far fitter. For long-term investors, shares remain the natural selection.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.