For years, I kept my savings in a regular savings account earning almost nothing. Maybe 0.5% interest if I was lucky. When friends talked about investing, I'd nod politely and change the subject.

My reasoning seemed sound: the stock market goes up and down. Sometimes it crashes. I didn't want to lose money, so I kept it somewhere "safe."

It took me longer than it should have to understand what I was actually doing. I wasn't protecting my money. I was guaranteeing it would lose value.

The Difference Between Feeling Safe and Being Safe

There's a comfort in seeing your account balance stay stable. $10,000 this month. $10,000 next month. No drops. No scary red numbers. It feels secure.

But that stability is an illusion. While your account balance stays the same, the purchasing power of that money is shrinking. Inflation quietly erodes what your dollars can buy. At 3% annual inflation, $10,000 today will only buy what $7,400 buys in ten years.

You're not preserving wealth. You're watching it deteriorate in slow motion.

This is what I wish someone had explained to me earlier: there are two completely different types of risk, and most people confuse them.

Volatility Isn't the Same as Risk

Volatility is what most people think of when they hear "risk." It's the ups and downs. The market drops 10%, your stomach drops with it. You see red in your account and feel like you're losing.

But volatility is just price movement. It's temporary fluctuation. If your stock drops 20% and then recovers, you experienced volatility. You didn't experience loss unless you sold during the drop.

Real risk is different. Real risk is not having enough money when you actually need it. It's retiring at 65 and realizing your savings won't last. It's your money losing purchasing power because it never grew fast enough to outpace inflation.

From this perspective, keeping retirement money in a savings account is one of the riskiest things you can do. You're almost guaranteeing that you won't have enough.

Time Changes Everything

If you need money next month, investing it would be genuinely risky. Markets can drop in the short term, and you might have to sell at a loss.

But if you don't need that money for 20 or 30 years? The math changes completely.

Over long periods, markets have always trended upward. There are temporary drops, sometimes dramatic ones. But given enough time, those drops become small bumps on a chart that's moving steadily higher.

A one year investment horizon is genuinely volatile. A 30 year investment horizon is historically very stable. The risk isn't in the market. The risk is in having too short of a timeline or panicking during temporary drops.

What I Wish I'd Known Sooner

When I finally started investing, I didn't become fearless. I still felt uncomfortable when the market dropped. But I learned to separate my emotions from the reality.

A 10% drop in my portfolio wasn't a crisis. It was normal market behavior. As long as I didn't need that money for decades, I could ignore the temporary dip and let it recover. Which it always did.

What actually felt risky, looking back, was all those years I kept money sitting idle. I thought I was being cautious. I was really just paying an invisible tax to inflation while missing years of potential growth.

If I'd understood this earlier and invested that money at 8% annual returns instead of 0.5%, I'd have tens of thousands more today. That's the real cost of confusing volatility with risk.

The Question to Ask Yourself

If you're keeping long term money in savings accounts because investing feels too risky, ask yourself this: what's riskier? Temporary price fluctuations that historically always recover, or guaranteeing your money won't grow fast enough to support your future?

The answer depends on your timeline. If you need money soon, keep it safe and accessible. But if you're saving for retirement or other long term goals, the "safe" choice is actually the dangerous one.

I'm not suggesting you ignore risk or pretend volatility doesn't exist. I'm suggesting you understand what risk actually means for your situation. And for most long term goals, the biggest risk is doing nothing.

Moving Forward

You don't have to invest everything at once. You don't have to stop feeling nervous when the market drops. But you do need to recognize that keeping long term money in low interest accounts isn't protecting you. It's quietly working against you.

Start small if you need to. Get comfortable with the idea that temporary drops are part of the process, not evidence of failure. And give your money the time it needs to actually grow.

The safe feeling of a stable account balance isn't worth the real risk of falling short when it matters most.