The risk of NOT investing
The Sandbox Daily (7.31.2025)
Welcome, Sandbox friends.
Today’s Daily discusses:
the risk of not investing
Let’s dig in.
Blake
Markets in review
EQUITIES: S&P 500 -0.37% | Nasdaq 100 -0.55% | Dow -0.74% | Russell 2000 -0.93%
FIXED INCOME: Barclays Agg Bond +0.05% | High Yield +0.06% | 2yr UST 3.949% | 10yr UST 4.368%
COMMODITIES: Brent Crude -0.97% to $72.55/barrel. Gold -0.25% to $3,344.3/oz.
BITCOIN: -0.52% to $116,499
US DOLLAR INDEX: +0.24% to 100.051
CBOE TOTAL PUT/CALL RATIO: 0.90
VIX: +8.01% to 16.72
Quote of the day
Confidence is not 'they will like me.' Confidence instead is 'I'll be fine if they don't.'
- Christina Grimmie
The risk of not investing
Investing itself isn’t risky. NOT investing is the real risk.
When people think of investing, the first risk that often comes to mind is losing money.
And sure, markets fall. Stocks periodically crash. Headlines will scare you out of your positions.
But, what about the risk of not investing?
If retirement is 10, 20, or even 40 years away, you’re not just saving for some future expense – you’re building a future income stream to replace your paycheck. And playing it too safe can quietly erode your financial future.
So, how much money will you need?
Without running a million Monte Carlo simulations and teasing every input, I provide you a simple rule of thumb: take what you expect to withdraw from your portfolio each year and multiply it by 25.
That’s your target nest egg.
Need $100k a year? You’ll want around $2.5 million.
$250k a year? You’ll need $6.25M.
Now the hard part: getting there.
Taking an appropriate amount of market risk will be necessary because it’s difficult to meet long-term goals with only short-term investments.
Cash and interest-bearing high-quality bonds simply won’t cut it. This is where the real risk shows up – not market volatility, but missed growth opportunities.
Here, let’s use the oft-quoted rule of thumb – the “Rule of 72” – to plainly illustrate the outcomes.
Take 72 and divide it by your expected return, and that’s about how long it will take your money to double.
A 7% return doubles your money in just over 10 years.
A 3% return takes 24 years.
A 1% return? More than 70 years. Forget about it.
You can’t afford to sit on the sidelines or play it safe.
So, what should you do?
1. Embrace the long-term.
Typically, market declines are not what derail our investment strategy – it’s our reactions to those declines.
While stocks certainly will be volatile in the short-term, the long-term trend for stocks as a whole has been positive.
The long-term trend is clear. The stock market goes up over the long haul. Position yourself accordingly.
2. Diversification reduces risk.
Yes, hold stocks, but also look beyond them.
Fixed-income investments like bonds, commodities, bitcoin, and other non-correlated assets like real estate, private credit, and private markets can all play important roles to smooth out your investment journey.
Your specific mix of investments will be driven by your unique financial goals, comfort with risk, time horizon, liquidity needs, and personal preferences.
Ultimately, diversification reduces the risk of any single bet sinking the whole ship.
3. Stay disciplined.
Build a plan and stick to it.
Any time you go through periods of market fluctuations or don’t feel like you’re making progress because your neighbor YOLO’d NVDA call options, it’s important to remember why YOU are doing this – to reach your financial goals.
Don’t worry about your neighbor, don’t worry about Nvidia.
Make sure you are making progress on your goals.
Consider systematic investing like dollar-cost averaging, which is investing a set amount every month regardless of market direction or outlook, to help take emotions out of the equation.
This strategy can help turn market declines into opportunities, allowing disciplined investors to scoop more shares of their positions at lower prices.
Some of your best purchases come alongside the worst moments in market history.
4. Keep your “why” front and center.
You're not investing to beat the market or time the next turn.
You're investing to build the future you want.
Avoiding risk entirely feels safe. But in the long run, the real danger lies in falling short.
You don’t need to take reckless bets – just the right amount of risk to grow your money faster than inflation, taxes, and time can erode it.
Like most things in life, the key is finding balance
Because ultimately, staying invested – and staying on target – gives you the highest probability of success.
That’s all for today.
Blake
Questions about your financial goals or future?
Connect with a Sandbox financial advisor – our team is here to support you every step of the way!
Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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