The Quiet Cost of Sitting in Cash
A lot of people think they’re being conservative with money when what they’re actually doing is losing it slowly.
On this week’s True Wealth Show, Matt Dickson and I covered about four different things we probably shouldn’t have tried to cover in one hour — GameStop trying to buy eBay, quantum computing, where AI might be taking us — and we somehow landed at the one place all of it was pointing: the world is changing fast, prices are not what they were five years ago, and the people who parked their money in cash because cash “felt safe” have quietly been paying for that decision the whole time.
What “conservative” used to mean
For a long generation of savers, “conservative” meant CDs, money market accounts, savings bonds. You earned a modest interest rate, your principal didn’t move, and you slept well. In a low-inflation environment, that worked. The dollar you put in stayed roughly a dollar, plus a little.
That math has changed, and most people haven’t updated the picture in their head.
What conservative actually buys you now
Think about what a dollar has done since 2019. Houses across most of the country are roughly twice what they were six years ago. Groceries, cars, services, restaurant tabs — pick any of them. The price tag on ordinary life has moved a lot.
If you held $30,000 in cash through that stretch — same number on the statement, same comforting feeling that nothing had happened to it — your $30,000 today buys closer to what $15,000 used to. Nothing happened to the number. Quite a lot happened to what the number could do.
That’s the part that doesn’t show up on a statement. There’s no line item that says purchasing power lost to inflation, year-to-date. The damage is invisible. It only becomes visible when you go to actually buy something.
Why this matters more right now than it used to
The federal debt isn’t getting smaller. Neither side of the aisle is signaling a real appetite to take the painful steps it would take to reverse the trend, and as long as that’s true, the most likely path forward involves continued currency printing. Currency printing is, in plain English, the slow conversion of your savings into something worth less.
This isn’t a doom prediction. It’s just the arithmetic of the environment we’re actually in. The question for anyone holding meaningful cash isn’t will inflation hurt me? It already has been. The question is whether the next five or ten years rhyme with the last six.
Real conservative isn’t the same as feels-conservative
Genuinely conservative — the way we use the word at the firm — means a portfolio built to hold up across a range of futures, including the inflationary one. That usually means some mix of things that produce real economic value: businesses, real assets, instruments that have a chance of keeping pace with or outrunning the erosion of the dollar. The mix depends on the person, the timeline, and the risk they can actually sleep through.
What it does not mean is a pile of cash that the statement says is the same as it was last year. Same number, different dollar.
What we’d want you to do with this
If you’ve been holding more cash than you need for the next year or two of expenses and an honest emergency cushion, it’s worth asking why. “I’m being conservative” is a reasonable instinct. It’s just worth checking whether the instinct still maps to the environment.
The answer isn’t go chase the hot thing. The answer is usually some version of put the long-term money to work in a way that has a chance to keep up, and leave the short-term money where it belongs — accessible, predictable, and not asked to do a job it can’t do.
That’s a conversation. It’s not a formula.
Listen to the full episode
This one wandered through quantum computing, GameStop, AI, and what happens when your kids’ generation looks at the world through a totally different lens than yours. We tied it back at the end. Sort of.
If you’re holding cash you’ve been meaning to do something with and just haven’t gotten around to deciding what — that’s the kind of conversation we have all the time. No pressure, no pricing on the first call. Reach us at info@littlejohnfs.com or 541-375-0898.