Should I hoard cash or invest?
There's a quiet assumption behind a big cash balance: that holding money is the same as preserving it. For a few months, it is. Over a decade, it isn't, because the number in the account stays the same while the things it can buy keep getting more expensive. Preservation isn't about keeping the dollars. It's about keeping the purchasing power.
The slow leak
At 3% annual inflation, a dollar loses roughly a quarter of its value in ten years and nearly half in twenty. A high-yield savings account can offset some of that, but after taxes on the interest, cash usually treads water at best. None of this is dramatic in any single year, which is exactly why it's dangerous: the loss is real but invisible, and invisible risks are the ones that compound.
Cash isn't risk-free. It's risk-deferred: you've simply chosen the slow, certain loss over the faster, uncertain one.
What real estate does differently
Hard assets like apartments tend to move with inflation rather than against it. When prices rise, rents rise, and so does the value of a building that produces those rents. A fixed-rate mortgage adds a second quiet advantage: you borrow today's dollars and repay them with tomorrow's cheaper ones, while your tenants cover the payment. Inflation, which erodes cash, actually works in favor of a well-financed real asset.
This is not all-or-nothing
None of this argues for holding zero cash. You should keep an emergency reserve (enough to sleep at night and to handle the unexpected) in liquid, boring, accessible form. The question isn't "cash or investments." It's "how much cash do I actually need to be liquid, and is the rest of it quietly shrinking?"
A reasonable framework: hold six to twelve months of expenses in cash, keep a separate reserve for any large known expense in the next couple of years, and then ask whether the remainder is working or just waiting. Capital that has no job and no deadline is capital that inflation is slowly taxing.
The honest caveat
Investments can lose money; cash, nominally, cannot. Real estate is illiquid: you can't sell a quarter of an apartment building on a Tuesday because you need the money. That illiquidity is a real cost, and it's the reason the reserve comes first. But once your liquidity needs are genuinely met, the safest-feeling choice and the safest choice stop being the same thing.
Keep enough cash to be free and calm. Recognize that the rest, sitting idle, is losing ground every year. Preservation over a long horizon usually means owning things that rise with prices, not the currency those prices are quoted in.
