What would you call an investment strategy that made you lose money? A bad one right? I would call it a liability. Now before I get attacked by people who understand standard financial accounting, I understand that on a balance sheet, cash on hand is considered an asset. Hear me out though. 

Let?s say we had 1000 in June of 2013, and put it in an account or under a mattress for ten years until July 2023. You?d still have 1000 in cash or in an account. You?ve lost nothing and gained nothing, or have you? 

According to the US Department of Labor?s inflation calculator, it would take $1,306.14 in 2023 to purchase the same thing a 1000 would have purchased in 2013. That represents a loss of value by over 30% in just 10 years. 

Conversely,  a simple investment in a mutual fund or other investment vehicle that earned an average of 7% would have earned you money. 1000 dollars invested for 10 years would be worth 1967.00. 

My stance is that cash on hand, unless it is going to be used to purchase an asset, is a liability because it costs you money.