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>Even keeping it all in cash in a checking account has risk.

Besides the obvious FDIC 250k limit, can you clarify this? I don't see how leaving the money alone would have any risk.

Inflation outpacing your account's interest rate is a risk factor which FDIC doesn't insure against. While your balance won't decrease, its buying power relative to the current dollar will weaken.

E.g. an $800k purchase in 2003 would now cost $1.3m.

Inflation % vs interest % doesn't directly matter. If Im spending under a certain amount of the interest income, and reinvest the rest, its always going to be inflation beating.

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