Cash Is NOT King
Cash feels safe… but too much of it can hold investors back over time.
What This Means
Cash feels safe because it just sits there. But safe and smart aren’t always the same thing. The number in your bank account stays the same and that creates a sense of stability.
But over long periods of time, holding too much cash can quietly become a problem. Inflation slowly chips away at purchasing power, while money sitting on the sidelines misses the opportunity to compound and grow.
This is something I see often with business owners. After years of working hard and building successful businesses, many end up holding large cash positions because they’re waiting for the “right” moment to invest.
The challenge is that markets rarely give people a perfect green light.
Cash absolutely has a role. Emergency reserves and short-term needs matter. But beyond that, your money should usually have a purpose and a long-term plan behind it.
Cash itself isn’t king.
How you use it is what matters.
Common Questions
How much cash should I keep?
Everyone’s situation and comfort level is different. Income stability and monthly expenses both play a major role. Whether it’s 3 months, 6 months, or even 2 years of reserves, the important thing is understanding your number and having a clear reason for holding it.
Why is cash considered a losing investment over time?
Over time, inflation slowly steals purchasing power. Simply put—things get more expensive, while cash itself usually doesn’t keep up.
Should my safety net of cash be in a savings account?
We usually prefer fixed-income assets that may pay more than a traditional savings account.
Depending on the situation you may want to consider CDs, Treasury Bonds, or a high-yield savings account. The goal is to keep your cash safe and accessible — while still making it work for you.
Remember This:
Cash is a tool — and like any tool, its value lies in how you use it.