The U.S. Dollar is a poor investment. In fact, over the past 30 years, if you had simply “owned” dollars, you would have lost roughly 56% of your purchasing power.
Think about that for a moment. While your account balance may not have changed, the amount of goods and services your dollars could buy dropped dramatically. In real terms, that’s the same as losing money.
The U.S. Dollar has no intrinsic value—its worth is not derived from any tangible asset or inherent quality. Its value exists largely because the U.S. government accepts it as payment for taxes.
U.S. Dollars are good for transacting. They’re how most of us get paid, buy groceries, and pay our bills. Dollars are essential for daily living—but they make for a very poor long-term investment.
It’s smart to keep some cash available for everyday expenses and emergencies. But beyond that, holding excessive cash becomes risky once you consider inflation and erosion of purchasing power.
That’s why it’s critical to invest long-term savings in quality assets with intrinsic value. Over time, stocks—particularly a diversified portfolio like the S&P 500—have been the best way to build real wealth.
During the same 30-year period, an investment in the S&P 500 (with dividends reinvested) would have delivered nearly a 1,000% total return after accounting for inflation!
So while stocks may seem risky in the short term, it’s actually far riskier not to own them in the long run.