When I was a working musician, I held on to cash every time I could. I didn’t invest. I didn’t take risks. I just saved and saved.
On paper, that might sound responsible. But over time, I noticed something: even as my income grew, my net worth barely moved. I was earning more but not building anything. I wasn’t behind because I didn’t know how to make money. I just didn’t know what to do with it once I had it.
Holding too much cash gave me a sense of control. It felt safe. But that comfort came at a cost.
Why Holding Too Much Cash Feels Safe
High earners often keep more cash than they need. Not because they don’t understand investing, but because their early financial experiences taught them to value safety and access above all else.
If your money story includes instability (like income volatility, debt, or burnout) you may lean toward liquidity. Having a large cash balance becomes a way to stay in control. But holding too much creates stagnation. It also means missed growth, hidden opportunity cost, and loss of purchasing power over time.
Common Behavioral Biases Behind Excess Cash
Several well-studied patterns explain this habit:
1. Loss Aversion
We feel the pain of loss more than the pleasure of gain. Losing money in the market feels worse than letting cash sit idle, even if both reduce wealth over time.
2. Mental Accounting
We often treat cash as “untouchable” or “reserved” even when it could be repurposed. For example, keeping a six-figure emergency fund while carrying low-interest debt or skipping 401(k) contributions.
3. Status Quo Bias
We prefer to keep things as they are, even when change would help. A large cash balance feels like a success, so we avoid reallocating it.
4. Illusion of Control
We believe we can manage outcomes better by keeping our money close. In reality, this often leads to inaction or overly conservative choices.
When Comfort Becomes a Drag on Progress
There’s nothing wrong with wanting financial stability. But high income with low movement often leads to frustration. You’re doing everything right (saving, spending responsibly, avoiding debt) but you feel stuck.
That’s the comfort trap. The money is there, but it’s not in motion. Over time, that lack of movement limits what your money can actually do.
Final Thought
If you’ve ever felt like your money isn’t working as hard as you are, you’re not alone. Many high earners end up sitting on large cash balances, not because they’re careless, but because they’ve never built a system that moves their money with purpose.
Start by asking: what is this cash for, and what could it be doing instead?
👉 The next post in this series will focus on specific tactics to right-size your cash and put the rest to work.
