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“I prefer to keep my money in cash—you never know.”

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“Common objection: ‘I want to keep my money available.’ Here’s how to respond wisely.”

Keeping your money in cash “just in case”: a safety net that can be costly

Many people say they prefer to keep their money in cash because “you never know what might happen.” This mindset stems from a basic need for security — the desire to be able to handle the unexpected. And that’s completely valid.

However, wanting too much liquidity often means sacrificing growth, fighting inflation, and — in the long run — quietly becoming poorer. The key is not to keep everything in cash, but to find the right balance between safety and returns, based on clearly defined goals.

1. Cash loses value over time

Inflation is the silent enemy of savings. Even at a moderate rate of 3% per year, your purchasing power quickly declines.

Concrete example:

  • $10,000 kept in a low-interest account for 10 years
  • Average inflation: 3%
  • Real value after 10 years: about $7,400 (in purchasing power)
In other words, idle cash loses value every day. It’s important to recognize that doing nothing with your money is also an investment choice — and often a losing one.

2. Too much liquidity hinders financial growth

Cash (in a bank account or savings account) earns little to no interest, especially after taxes. Meanwhile, a well-structured portfolio can generate returns of 4%, 5%, or even more per year over the long term, depending on your risk tolerance.

According to a study by the Financial Planning Institute (FPI), households that invest a reasonable portion of their assets while maintaining a properly sized cash reserve accumulate up to twice as much wealth over 20 years compared to those who keep all their money in cash.

3. The fear of the unexpected: an emotion to channel, not to endure

The fear of missing out (what we call the “just in case” mindset) is normal. But it should be managed methodically, not emotionally.

That’s why a good financial plan includes an emergency fund:

  • Generally 3 to 6 months of essential expenses,
  • kept in a highly liquid account (e.g., a high-interest savings account or a cashable GIC),
  • readily available in case of hardship (job loss, illness, family emergency).

Once that safety cushion is in place, the rest of your money can be invested according to your goals — retirement, medium-term projects, or future security.

Keeping everything in cash is confusing flexibility with stagnation.

4. Investing isn’t putting your money at risk — it’s putting it to work

Many people believe that as soon as you invest, you’re taking a risk. But the real risk is letting years of potential growth slip away.

With proper diversification and a well-suited strategy, you can:
  • keep a secure portion,
  • generate income (e.g., dividends, interest),
  • grow your capital according to your goals.
A well-structured portfolio takes your short-, medium-, and long-term needs into account and helps you avoid unnecessary risk while outperforming inflation.

5. Good planning provides both freedom **and** security

The role of a financial planner isn’t to push you to invest all your money, but to help you properly segment your needs:
  • What should stay liquid?
  • What can be invested prudently?
  • What can grow over the long term?
By doing this exercise, you often realize that you can maintain flexibility while making smart use of the money you don’t need right away.

In conclusion

Keeping your money in cash “just in case” is human. But keeping everything in cash often means slowly losing wealth to inflation and missing opportunities to build financial freedom.

The right strategy isn’t to invest everything or to keep everything. It’s knowing how much to keep, why, and what to do with the rest.

Sources :

  • Statistics Canada, Consumer Price Index, 2023
  • Bank of Canada, Average Annual Inflation Rate, 2022
  • Vanguard, Time in the market beats timing the market, 2020