The Unallocated Cash
Keeping savings in a zero-interest checking account. Safety from market volatility is paid for in purchasing power.
A $10,000 cash balance sits in checking. The money is safe, accessible, and visible on the screen. The transfer to an investment account remains on the schedule.
Over thirty-five years, the checking balance grows to $11,900 at 0.5%. Invested at 7%, it reaches $106,000. The cost of safety is $95,000 lost to inflation.
Volatility is immediate and visible. Inflation is gradual and quiet. Checking balances are kept safe from drops, but not from erosion.
Executing the transfer today recovers the entire compounding gap. One afternoon of paperwork changes the trajectory of the asset.
Intention does not yield return. Only allocation compounds.