Core Insights - Holding too much cash may erode wealth rather than protect it, as cash is not a growing asset and its value diminishes over time due to inflation [1][2][3] Investment Performance - Cash has historically been the worst-performing asset class, significantly lagging behind stocks and bonds, even during volatile market conditions [2][4] - A $5,000 annual investment in stocks from 1980 to 2023 would have yielded exponential growth, while the same investment in cash would have resulted in minimal returns [4] - Long-term data shows that large capitalization stocks returned 10.4% annually from 1926 to 2024, compared to 5.0% for long-term government bonds and just 3.3% for T-bills [5] Wealth Accumulation - An investment of one dollar in the S&P 500 at the start of 1926 would have grown to $18,212 by the end of 2024, while the same dollar in T-bills would have only grown to $24, highlighting the stark difference in wealth accumulation [6] Alternative Investments - Bonds are presented as a stable alternative to cash, offering interest payments and the potential for appreciation, unlike cash which does not increase in value [7]