Cash vs Invest Calculator
Long-term cost of holding cash vs investing.
Compare long-term value of holding cash vs investing the same amount at expected market returns. Enter cash rate and investment return to see opportunity cost.
What this tool does
Enter amount, cash rate, investment return, and horizon. The tool shows opportunity cost.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
50,000 held as cash at 3% vs invested at 7% over 20 years: cash grows to 90,306; investment to 193,484. Opportunity cost of cash: 103,178. Some cash buffer is necessary; too much costs real long-term wealth.
Quick example
With amount of 50,000 and cash rate of 3% (plus investment return of 7% and horizon of 20), the result is 103,178.66. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Amount, Cash Rate, Investment Return, and Horizon. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.
What's happening under the hood
Compound growth at each rate, subtract. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Why the number matters
Saving without a target is like driving without a destination — you'll make progress, but you won't know when you've arrived. This tool gives you a concrete figure to work toward, which is the first step in turning a vague intention into an actual plan.
What this doesn't capture
The calculation assumes a steady savings rate and a stable interest rate. Real saving journeys include emergencies, windfalls, and rate changes — especially in easy-access products. The figure is a direction of travel, not a guarantee.
Where to go next
This calculation rarely sits alone in a planning exercise. If you're running these numbers, you'll probably also want the compound interest calculator, the emergency fund calculator, and the short vs long term savings calculator — each one answers a different question in the same territory. Treating them as a set rather than in isolation usually produces a more honest picture.
Cash vs invest produces a gap figure based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Compound growth at each rate, subtract.
References
Frequently Asked Questions
How much cash is too much?
Does inflation change things?
What about tax-free accounts?
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