Immediate Answer: Should You Seek Investment Advice or Stay in Cash?
For most Adelaide households with a secure emergency fund and no high-interest debt, investing at least part of your excess cash is usually more effective over 5–10+ years. However, keeping some money in cash remains essential for short-term needs, emergencies, and upcoming expenses within the next three years.
Consider this scenario: an Adelaide couple in their late 30s has $40,000 sitting in a savings account. If they leave it there for 10 years earning modest interest, inflation will quietly eat into its purchasing power. But if they invest a portion in a diversified portfolio while keeping enough cash for their immediate needs, they give that money a real chance to grow ahead of rising costs.
The right answer isn’t all cash or all investments—it’s finding the balance that matches your financial situation, goals, and timeline.
Money Path is an Adelaide-based financial planning service that helps local residents work through exactly this decision. Whether you’re saving for a house deposit, planning school fees, or building wealth for retirement, the goal is to create a plan that lets you sleep at night while still making progress on your financial future.
Why Cash Feels Safe — And When It Actually Isn’t
After recent market volatility and interest rate hikes, it’s no surprise many Adelaide residents find comfort in seeing a fixed balance in their bank account. Cash feels predictable and safe.
Here’s why cash genuinely provides security:
No visible day-to-day losses — your balance doesn’t drop when markets fall
Government deposit guarantees — up to $250,000 per institution under the Financial Claims Scheme
Immediate access — you can pay bills, cover rent, or meet mortgage payments without waiting
There’s also the psychological comfort of seeing a stable number in your bank account, rather than watching investment values fluctuate.
Cash is genuinely the safest option when you have:
Upcoming surgery or medical expenses
A house settlement within 12 months
Known school fees over the next 2–3 years
But “all cash” can become risky when you’re looking at longer timeframes. If you have a 25–30 year retirement horizon or children whose education costs arrive in a decade, sitting entirely in cash means falling behind.
Consider a 45-year-old Adelaide worker who has kept $150,000 in cash since 2020. While the balance hasn’t dropped, inflation has reduced its purchasing power significantly.
The Hidden Cost of Inflation on Savings
Inflation quietly erodes your savings’ value. In recent years, Australian inflation surged to levels not seen in decades before easing toward targets.
For example, $50,000 in a savings account in January 2021 might have grown to about $55,000 by 2024, but its real purchasing power is less than $48,000 in 2021 dollars.
This “real return” after inflation is minimal or negative in many cases.
Adelaide-specific costs have followed this pattern:
Median house prices in suburbs like Prospect and Norwood have climbed significantly
Private school fees continue to rise annually
Health insurance premiums increase faster than general inflation
Even with improving term deposit rates, many find returns barely keep pace with inflation. The true risk of cash is losing purchasing power over 5–15 years while your statement shows a stable number.
Comparing Term Deposits vs Long-Term Investments for Wealth Creation
Many savers compare bank term deposits with diversified investment portfolios when deciding what to do with extra cash.
Term deposits explained: A term deposit locks your money away for a fixed period at a fixed interest rate. Early withdrawal usually means losing some interest.
Pros of term deposits:
Certainty of return
Protection against short-term market falls
Simple and easy to understand
Suitable for known timeframes (e.g., renovation in 18 months)
Cons of term deposits:
Locked-in rates that might lag inflation
No growth beyond interest payments
Tax inefficiency for higher-income earners (interest is fully taxable)
Long-term investments explained: Long-term investments involve diversified portfolios of shares, bonds, and other assets. Portfolio management aligns investments with goals and risk tolerance.
Benefits of investing over 7–10+ years:
Potential for capital growth above inflation
Compounding of returns over time
Better historical odds of beating inflation
Risks to acknowledge:
Short-term volatility
Possibility of losses during downturns
Emotional challenge of staying invested during market dips
An example: $80,000 in rolling 12-month term deposits at 4.5% over 10 years grows to roughly $124,000. The same $80,000 invested in a diversified growth portfolio averaging 7% annually could grow to about $157,000—a difference of $33,000.
Money Path helps clients decide how much should stay in term deposits versus long-term investments based on their goals and timeframes.
When Holding Cash Makes Sense
Cash isn’t “bad”—it’s important to use it for the right purposes and timeframes. Scenarios where holding cash makes sense include:
Emergency fund — 3–6 months of living expenses in an accessible account
Home deposit within 0–2 years
Planned expenses within 1–3 years (car, dental work, family trip)
Job uncertainty
Pre-retirement with known expenses
A simple guide:
Timeframe | Appropriate Vehicle |
|---|---|
0–3 years | Cash, high-interest savings, term deposits |
3–5 years | Conservative mix (some cash, some investments) |
5–7+ years | Consider growth investments |
Appropriate cash vehicles include high-interest savings accounts and short-term term deposits.
Beyond numbers, cash buffers provide emotional value—better sleep, reduced stress, and flexibility. Money Path regularly reviews clients’ cash levels to avoid overexposure to low-return holdings.
When Investing Excess Savings May Be Appropriate
“Excess savings” refers to money not needed for emergencies, debts, or short-term goals. Signs that excess cash might be better invested:
Emergency fund in place
High-interest debts paid off
Major short-term goals fully funded
Money needed in more than 7–10 years
Life stages where investing makes sense:
Late 20s–30s professionals building wealth
Families in their 40s saving for education costs
Pre-retirees boosting super and investments
Money Path discusses investment options including diversified portfolios and superannuation strategies, matching investment mix to time horizon and risk comfort.
For example, investing $1,000 per month over 15 years at 6% annual return could grow to about $290,000, versus $227,000 at 3% in cash—a difference of over $60,000.
Investing doesn’t have to be all or nothing; clients may gradually shift surplus cash into investments over 12–24 months.
Risk Management and Insurance Considerations
Building a secure financial future involves risk management alongside investment growth. A comprehensive financial plan includes protecting what you’ve worked hard to achieve.
Risk management means identifying threats—illness, job loss, market downturns—and putting strategies in place to reduce impact. A financial planner assesses your situation, goals, and risk tolerance to deliver tailored advice.
Insurance cover—life, income protection, trauma—can mean the difference between a setback and a crisis. A planner helps determine appropriate cover to protect your family and financial life.
Investment advice also balances risk and reward through diversified portfolios, including self managed superannuation funds. This strategic guidance is vital for retirement planning.
Working with Money Path means benefiting from deep industry knowledge and commitment to exceptional service. Whether managing debt, planning estate needs, or accumulating wealth, clients receive insightful guidance and constructive resolutions tailored to their circumstances.
A comprehensive plan includes risk management, insurance, and investment strategies aligned with your aspirations. With a financial planner who is a member of the Financial Planning Association, you receive high-quality, personalised advice supporting financial wellbeing and long-term success.
Risk management empowers informed decisions, achievement of goals, and peace of mind throughout your financial journey.
How Money Path Advisers Balance Liquidity and Growth
Money Path focuses on balancing liquidity (accessible cash) and growth. This balance differs for every Adelaide household and is achieved through the team’s diverse skills delivering tailored advice.
Typical process for clients:
Clarify goals — short-, medium-, and long-term
Map to timeframes — when funds are needed
Determine cash requirements — how much must be accessible
Allocate remainder — to appropriate investments
Portfolios are diversified across asset types via multi asset class portfolios to manage risk.
Money Path regularly reviews plans when interest rates change, family circumstances shift, or major life events occur.
Every recommendation is tailored to comfort with risk, income needs, and values—not one-size-fits-all. Clients receive thoughtful, personalised advice ensuring long-term financial wellbeing.
Example: A couple in their 50s might hold 12 months living costs in cash, 2–3 years in cautious investments, remainder in growth portfolio for retirement. This provides security for near-term needs and growth for the future. Money Path offers lifetime financial solutions adapting to changing needs.
How a Financial Planning Professional in Adelaide Can Help You Decide
Money Path helps Adelaide residents decide how much to keep in cash and how much to invest. Working with a financial adviser provides structure, clarity, and accountability.
Specific ways Money Path assists, such as through their free budget planner:
Analysing savings, debts, super, and expenses
Building a written comprehensive financial plan that separates money by purpose and timeframe, including estate planning to ensure your wishes are honored
Stress-testing plans against market volatility and inflation
Coordinating strategies across partners, family, and business interests
Money Path works with clients across Adelaide regions through in-person and online meetings.
What to bring to your first discussion:
Recent bank statements
Super statements
Home loan details
Estimates of upcoming expenses
Selecting a financial planner involves verifying licensing through the ASIC Financial Advisers Register. Money Path offers transparent, fixed-fee structures and an obligation-free initial meeting.
The first conversation focuses on understanding your goals and concerns rather than product selection. It’s about helping you feel heard and building a foundation for informed decisions.
If unsure about your cash vs investment mix, personal financial advice serves better than generic internet rules.
Next Steps: Talking to Money Path About Your Cash and Investments
Keeping everything in cash can erode wealth over time, while investing without a plan can feel risky. The solution is finding your personal balance.
A simple 3-step path forward:
List your current position — cash holdings, debts, and major goals over 1, 3, 5, and 10+ years
Reflect on your experience — how you felt during recent market volatility and interest rate changes
Book a conversation — talk with Money Path to create a practical cash and investment plan
Money Path can help whether you’re starting your financial journey, in peak earning years, or approaching retirement. The outcome isn’t a generic product—it’s a personalised balance between security and growth aligned to your life in South Australia.
Don’t wait for the “perfect time.” Small, well-planned steps now can make a significant difference by 2030 and beyond.
FAQ: Cash vs Investing for Adelaide Investors
How much should I keep in my emergency fund in Adelaide?
Most Adelaide households benefit from keeping 3–6 months of living expenses in an accessible savings account. Variable income or less stable industries may require six months for safety.
Is it a bad idea to keep more than $100,000 in cash?
It depends on your timeframe and goals. Money needed within 2–3 years should stay in cash or term deposits. Otherwise, you risk losing purchasing power to inflation. A review can clarify if your cash is working hard enough.
What if I might want to buy a home in the next 2–3 years?
Funds for a house deposit within 2–3 years should stay in cash or short-term term deposits. Certainty of availability outweighs potential investment gains over short periods.
Can I invest if I still have a mortgage on my Adelaide property?
Yes. Strategies like using an offset account for cash buffers while investing additional savings can work well. Balancing mortgage paydown and investments often makes sense.
What happens if markets fall right after I invest?
Short-term falls are normal. If invested for 7–10+ years, you have time to recover. Matching investments to timeframes helps ride out volatility without panic.
Is superannuation considered an investment or cash?
Superannuation is typically an investment, not cash. Self managed and industry funds invest contributions in diversified portfolios. Super is usually locked until preservation age and part of retirement planning.
How often should I review my cash vs investment split?
Review at least annually or when circumstances change—new job, new baby, inheritance, major expense. Regular reviews keep your plan aligned with your evolving financial life.
Ready to work out the right balance? Contact Money Path to start a conversation about your financial wellbeing. Generic calculators and rules can’t replace a tailored plan built around your actual goals, comfort level, and life in Adelaide.
