You can save for a lot of things, but saving your way to prosperous retirement is near impossible. Historically (and this isn't expected to change any time soon) unless you're enjoying a truly significant wage and saving a massive amount of it, the conspiring elements of taxation, inflation and less than market returns will ensure your savings won't meet your long term expectations – unless you're intending to live extremely frugally. Yet despite all evidence pointing to the contrary, people still see cash as "safe" and investing is akin to "gambling".

A new survey by BlackRock of Americans and Canadians has shown a big disconnect when it comes to saving and investing. 51% of Canadians believe investing is like gambling, while 72% of Americans don't see investing in financial markets as a way to put money toward their long-term goals.

Their feelings towards cash seem very positive though, with 60% of the Canadians surveyed holding all their money in cash, with the figure being 65% for surveyed Americans. The attention grabbing thing about these responses is the environment they exist in. The US and Canada have spent more than half a decade stuck in an ultra-low interest rate environment, 0.25% in the US, and from 1% to the current 0.5% in Canada. 

At the same time rates have been held at these lows, the Canadian TSX has increased 78%, while the US Dow Jones 500 has increased 166%. That's a significant return forgone to enjoy the feeling of safety. For Americans it seemed the attachment to cash came from family influences. With almost half recalling positive childhood memories of saving and starting bank accounts, but 78% suggested they were not raised to feel comfortable about investing. In Canada, 62% of those surveyed were not using a financial adviser. As you might notice, this appears to line up with the 60% of Canadians surveyed who hold all their money in cash.

If we're to draw any conclusions, it's that financial education plays a big part in the type of lifestyle or retirement people are likely to have. Assuming investing is a risk while having a deep seated attachment to dropping money in a piggy bank will have consequences. The biggest will be an ongoing loss of purchasing power as the very real risks of inflation and taxation are ignored. Finally, another survey and we find more cash dragging on potential returns. Every year Vanguard releases a Self-Managed Super Fund report and this year cash held by funds has grown to 35%, to those SMSF trustees surveyed.

In 2013 that figure was at 26% and the reason for the increase was due to market uncertainty. With the Australian cash rate now at record lows the surveyed SMSFs seem to have seen something spooky in their crystal balls that has them accumulating cash. Given the local share market is still slightly in the red for the year this might seem a smart move – except when cash is lined up against the returns of every other major asset class in 2015. 

Cash looks fantastic against the local market, but lags Australian & international bonds, international shares and Australian and international listed real estate. As with our cash happy friends in the US and Canada there appears to be an education gap with local SMSFs. As SMSFs cash holdings grew over the previous 12 months, the number of surveyed SMSFs using a financial planner fell to only 36%.

And that's the thing about good financial advice and education, without it, you don't know what you don't know.