They are huge…..far bigger than put your money to use if you actually invest productively rather than speculate.
The biggest risks are:
Losing out to inflation. Inflation is 2%-3% or more in most countries and could go higher. The banks don’t pay that much in most countries. Since 2008 and 0% interest rates, many people have indirectly lost over 30% of their money, as this loss to inflation compounds.
Currency devaluation. You do manage to beat inflation in bank deposits but you live in a country which experiences a currency shock. This harms expats more than locals, but it can affect everybody, because imported costs associated with a weak currency will eventually push up the inflation rate.
Institutional risks. The two previous points does sometimes push people towards higher-risk options. Places like Georgia and Cambodia have seen an increase in foreign deposits as both countries offer reasonable deposit rates on the USD. Yet this is taking a risk, for a return which isn’t as good as the stock markets
Relative losses. Let’s say you manage to beat inflation in the bank in a safe way, and avoid currency risks. Even in this case, cash has never beaten other investments long-term. If you can deal with a bit of volatility, it makes sense to invest rather than save. You will also feel bad if you have friends who have became wealthy slowly from investing, whilst your money just stays in cash earning 0%.
One of the key things is hidden the Risk.
I strongly agree. Given the current situation we have, inflation is slowly creeping in. As a matter of fact, the third world countries are experiencing it much evident than the developed countries. Hence, the citizens of the third world mostly suffers. Although inflation is not really enclosed in poor countries alone but can also happen to the soaring countries as there are instabilities to the economy from time to time.
The purchasing power of currency also plays a great role. If ever people would opt to store all their funds in a platform that is known to depreciate over time, it would be a huge risk because once worse things happen (such as excessive money printing) devaluation of the currency will happen.
So in my opinion, the risk of not investing is regret. Most often than not, we regret the things we didn't do. We often regret the chances we didn't take and the opportunities that we let slip away. If you won't invest today in something safe from aforementioned factors, then expect to regret it soon in the future.