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If Cash Is Your Only Savings Strategy, You're Losing Money

Even though investing can be intimidating, it's the only way to keep you from losing money over time to inflation. According to a BlackRock survey, 58% of Americans hold their assets in cash, and all of that cash is subject to inflation. The current inflation rate is at 1.9 percent and has averaged 3.28 percent since 1914. This means the money that's being stored in a 1% interest rate account is declining in value over time. It probably doesn’t seem like much of a difference now, but staying this course until retirement means losing out on quite a bit of growth. Now, this doesn't mean you should close your savings account and move it all to an investment--that money is necessary for life's little emergencies--but if you've been building up a nice nest egg in a traditional savings account, it's time to put that money to work.
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