There is a golden rule to live by: never invest what you cannot afford to lose.
FOLLOW IT.
This ^^ a million times over!
Let's say you are cannot afford to lose any of your savings so you don't invest anything then you have all your savings in fiat currency, investing in a currency that will lose its value over time
Your logic is flawed. The value of fiat savings actually generally will increase over time even though the principle will experience inflation as both investment returns and interest on bank savings generally will be greater then inflation.
No your logic is flawed. Having fiat is one type of investment where if state fails so does your fiat.
Investing in a bank is another type of risk. The reason you get the 1% from the bank is beause of the risk that the bank goes bankrupt is about 1% per year.
When you put money in a bank its a double investment as you will lose money if either the bank or the fiat loses value.
Fiat savings will get smaller purchase power with time as the state will print more money, this is money 101 really.