Warm & Cosy
Cash feels safe. Cash feels familiar. Cash sits quietly in your bank account, doesn’t argue with you, doesn’t fluctuate wildly, and never sends you alarming notifications at 9:32am that begin with the words ‘Market Update’. Cash is the financial equivalent of tracksuit trousers or slippers.
But while cash is comfortable, investing for the long term is what actually gets your money off the couch, into the gym, and eventually running marathons while cash is still asking, ‘Do I HAVE to move?’.
Here’s some reasons why long-term investing is better than cash and, yes, I’ll try to keep it light, because money already makes people nervous enough.
Cash Is Safe… Like a Museum Artifact
Keeping money in cash feels prudent. Responsible. Sensible. You might even imagine it wearing a tiny helmet.
But here’s the problem: cash doesn’t grow. It just… exists. And while it’s existing, inflation is quietly sneaking in like a thief in the night and eating away at its value.
That £10,000 you lovingly parked in cash 5 years ago? It can now buy fewer groceries, fewer holidays, and significantly fewer fancy coffees. Cash is ‘safe’ in the same way that standing still on a moving walkway is safe. You’re technically not falling, but you’re definitely going backwards.
Long-term investing, on the other hand, at least gives your money a fighting chance to outrun inflation instead of being gently nibbled to death by it.
Markets Are Volatile… But So Is Life!
The biggest argument against investing is volatility. Markets go up. Markets go down. Sometimes they go sideways while screaming incoherently.
This scares people. But here’s the thing: volatility is a short-term problem. Long-term investing politely ignores it, like a seasoned adult ignoring drama in a group chat.
Zoom out far enough, and market ‘crashes’ start to look like small speed bumps on a very long road that mostly goes upward. Long-term investors understand that short-term chaos is the price of long-term growth. Cash investors avoid the chaos BUT also the growth.
If you never invest because you’re afraid of temporary drops, you’re essentially refusing to fly because planes experience turbulence. Meanwhile, everyone else is landing in Paris.
Cash Has No Ambition
Cash has zero goals. It wakes up every day and says ‘I’ll remain exactly as I am thank you very much’.
Investments, by contrast, are trying to do something. Companies are inventing things. Expanding. Hiring people. Solving problems. Sometimes messing up. Sometimes becoming wildly successful.
When you invest long-term, you’re backing human progress. When you hold cash long-term, you’re backing… the concept of waiting.
One strategy builds wealth slowly over time. The other builds anxiety as you constantly wonder whether now is finally the right moment to ‘do something’ with your money.
Timing the Market Is a Fantasy Sport
Cash lovers often say, ‘I’m waiting for the right time to invest’. This is adorable!
Waiting for the perfect moment to invest is like waiting for the ocean to be calm forever before learning to swim. It doesn’t happen. Ever.
Long-term investing works precisely because it doesn’t require psychic powers. You don’t need to predict recessions, interest rates, or what a central banker had for breakfast. You just invest consistently, stay patient, and let time do the heavy lifting.
Cash, meanwhile, sits there smugly while you attempt to outsmart millions of professionals with supercomputers. Spoiler alert: the computers usually win.
Compound Growth Is Basically Magic (Legal Magic)
The real reason long-term investing beats cash is compounding. which is the process where your returns start earning returns, which then earn more returns, until your money appears to be multiplying on its own like a well-behaved financial gremlin.
Cash doesn’t compound. It stagnates. It’s the difference between planting a tree and staring at a seed forever because digging a hole feels risky.
Long-term investors don’t get rich overnight. They get rich gradually, then suddenly, then quietly, while pretending it was ‘just discipline.’.
Cash Is for Spending. Investing Is for the Future
Let’s be clear: cash is not evil. You need it for emergencies, bills and those moments when life decides to throw a surprise plot twist your way.
But long-term wealth is not built by hoarding cash. It’s built by accepting uncertainty, staying invested, and letting time reward patience.
Cash is a tool. Investing is a strategy. One keeps you comfortable today. The other gives you options tomorrow. And tomorrow, unlike cash, tends to get more expensive.
If you’re possibly holding onto too much cash, I hope this little article might help with your thinking. As ever, I’m here if you feel you’d like to have a chat.
Speak to you next time…