Blog Post
The cost of not investing: A real-life example
A true story showing how leaving retirement money in cash instead of investing it can create a huge long-term opportunity cost.
What if the biggest risk to your money is not losing it, but leaving it parked in the wrong place?
A Missed Opportunity
A 22-year-old woman had saved $5,000 in a 401(k). When she changed jobs, the money was automatically rolled into a money market fund because she did not act in time.
Five years later, it was still sitting there.
What She Could Have Done Instead
She could have invested the money in a broad stock-market fund, such as an S&P 500 fund, rather than leaving it in a very low-growth cash-like option.
Here is the difference the original article highlights:
- Money market: about $5,600
- S&P 500 fund: about $13,400
That is nearly $7,800 of missed growth.
Why The Gap Gets So Big
- money market funds are designed for stability, not strong growth
- stock-market funds rise and fall, but historically have offered much more upside over time
- a few years of inaction can create a surprisingly large opportunity cost
Cash feels safe, but for long-term money, staying too safe can be expensive.
A Good Five-Minute Check
This week, log in and ask:
- Where is my old 401(k) or rollover account invested?
- Is any retirement money just sitting in cash?
- Does my long-term money actually match my long-term goal?
Small corrections today can change the entire shape of your future balance.