You've heard that cash is king, but what if the so-called king is actually putting your retirement plan at risk?

This popular phrase was originally coined by the CEO of Volvo after the 1987 market crash,

highlighting the advantage of having ample cash reserves during difficult times.

And just like Volvo back then, retirees often rely on cash reserves to protect themselves

from financial storms. However, many investors are mistakenly viewing cash as an attractive

investment rather than a safety net thanks to today's 4 to 5% yields. But beneath those attractive

yields lies a hidden truth. A silent thief called

inflation is slowly draining your wealth. What feels safe today might cost you dearly tomorrow.

Welcome to another episode of the Stay Wealthy Retirement Show. I'm your host Taylor Schulte,

and every week I tackle the most

important financial topics to help you stay wealthy in retirement. And now on to the episode.

When evaluating investment performance, two primary metrics are often considered

nominal returns and real returns. Nominal

returns are straightforward. They're the headline numbers that you see before factoring in

inflation, taxes, and or fees. For instance, if you invested $100,000 in the SMP 500, one year ago,

and now your investment is worth $110,000, well, you're not going to be a lot of $1,000 in the S&P 500 one year ago, and now your investment is worth $110,000, well,

your nominal rate of return is 10%. Nominal returns are easy to compare and widely cited,

however, they don't tell the full story. The real rate of return, i.e. real return,

reveals your true gains since it adjusts an investment's nominal return for one important factor. Inflation. The real return is the

percentage return of an investment after inflation is factored in. It's an inflation-adjusted

return. And yes, technically, the real return would also be net of things like fees and taxes,

but I'm keeping it simple today and using a slightly simplified definition of real returns

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