Why the "store of value" function of money doesn't work in practical world ?
Story
Rahul is a student of class 11th from commerce stream and today he learned about functions of money, in which he got to know about the function of "store of value" and how money helps us in making deferred payments. On the way to his home from school he saw a very nice looking headphones which are of ₹1000, after returning home he asked his father to buy it. Rahul's father asked him to start saving money for it and promises him that he will let him purchase the headphone next year.
After one year, Rahul has successfuly collected ₹1000 and he went to that shop and asked the shopkeeper for the same headphones, but it turns out that the same headphones has the price tag of ₹1060 and Rahul lacks ₹60.
Now Rahul went to his father and tell him the whole scenario to his father and he gave him ₹60 and Rahul bought the headphones. But Rahul was a curious boy and he was in doubt that why this all plays out to him.
Does Money really have a storage of value ?
Value is not real, it is human made. It is more a feeling than anything else. And even if we use some kind of matter which is quite stable in materialized form, the condition of "keeping the value" is totally outside of its stuff. There are the external conditions, the stable condition of exceptions of the inhabitants, and more totally external factors until the final one that is if you want to get something in exchnage for its "storage".Any storage of value function is only possible as long as a lot of external conditions are stable. Therefore there is really no way of saying "this is a storage of value", because everthing of this point directly to external condition, and not to the medium which is used like storage of value
@Olaf Schilgen
External Factors which reduces value of money.
Inflation
Inflation is simply increase in the price level of the goods over a set time period.(as discussed in Rahul's story). With the rise in inflation, the currency in the economy loses its purchasing power i.e its value. Currently inflation rate in India stands at approximately 6% which simply means that our currency (i.e Indian Rupee) is losing its value by 6% every year. And to defeat this inflation effect on our money we need to park our money where it will grow at 6% or more. Currently Indian banks has 4.40% rates on FDs, whereas savings account rates are 3.50%, which are not a good investment, as inflation will win this game by high margins. Thats why investing stock market, digital gold, mutual funds comes into the play which are comparatively good investments.
Governments printing of Money
In all countries governments and Feds hold the power to print money which also decreases the value of our by increasing money supply in economy. Sir Robert Kiyosaki (Author of Rich Dad , Poor Dad) said
Why would you save money if they can print it.
And the normal currency can be unlimited as government can print it as much as they want, which eventually make them unsound and as a solution for this we have Cryptocurrency like Bitcoin and Ethereum, which are limited in supply , there can be only 21 million of Bitcoins only.
Conclusion
So, this is how the "store of value" function doesn't exist in real world and eventually the term "value" is nothing but the adaptaion and belives of people and the storage value of a currency depends on both external reasons and internal reasons that revolve around the currency itself.