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Investing Basics

Cash is not safe, it just fails quietly

Money under a mattress loses buying power every year to inflation. At 3% inflation, $100 buys $74 of goods in ten years. 'Safe' is not the same as 'no risk of loss' — it is a choice about WHICH risk you take. Holding only cash is a guaranteed small loss instead of an uncertain outcome.

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Holding only cash for 20 years means…

  1. Zero risk
  2. Guaranteed loss of buying power to inflation correct
  3. Higher returns than stocks

There is no risk-free option. There is only choosing which risk you understand well enough to live with.

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