GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
it’s possible for you to read more about oureditorial guidelinesand our products and servicesreview methodology.
Its steady, predictable and always there when you need it.
But according to Fidelitys research, holding too much cash could quietly erode yourwealthrather than protect it.
With interest rates falling and inflation still creeping up, the value of cash is shrinking.
So, is cash really as safe as it seems?Fidelitys research suggests otherwise.
Lets dive deeper to find out why.
The long-term trend is even more striking.
That same dollar invested in T-bills would have grown to $24.
The difference isnt just significant its the difference between building wealth and barely keeping up.
Bonds: The Sleep-Well Option
Not into the stock market rollercoaster?
Bonds are your steady, drama-free alternative.
Like cash, bonds pay interest.
Unlike cash, they have the potential to appreciate and lock in higher yields.
Finding the Balance
Lets be clear: Cash isnt the enemy.
Its essential for covering emergencies and short-term expenses.
But keeping too much of it can cost you opportunities to grow your wealth.
Fidelitys research shows that while some cash is necessary, long-term growth comes from investing instocks and bonds.
Cash should primarily be used for emergency savings.
said Justin Haywood,certified financial planner(CFP) and president and co-founder of Haywood Wealth Management.
Money beyond short-term needs should be working for you through investments like stocks, ETFs and mutual funds.
Keep enough cash for emergencies, but begin to invest once youve established your financial cushion.
If your wealth isnt growing, its losing value.
More From GOBankingRates
Share This Article:
