Where Shoul you keep your Cash

Cash may be defined as money in the physical form, or as is known in business spheres currency, common examples being banknotes and coins. These physical forms of money usually quantify a commodity’s or someone’s (in terms of human resource earnings) worth. In this regard, therefore, one may use cash or its equivalent such as a cheque to purchase goods like food and clothes, or on a much larger scale invest it in a house, real estate or business.

In real terms, cash would be regarded as the legal tender which would enable someone to buy or even transact whatever kind of business they want. In theory, therefore, this means that the amount of cash one owns at a given time is equivalent to their wealth. But this is hardly usually the case because ordinarily majority of people own other tangible or fixed assets which may or may not be in the form of cash. In business terms therefore, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately in terms of their liquidity. Liquidity here means the ability of turning an asset into cash within a short period of time. The fact that cash is part of or equivalent to one’s wealth means that it has to be kept safely.

Having said that, therefore, there is the important question of where cash can be kept safely. It is common knowledge that banks exist because people need safe places to keep their cash. As banks are business entities, they would be keeping your cash or money at some cost, but in order to attract more money into their vaults they give a small interest to willing savers. A bank is thus, a good place for one to keep their money. It has been argued that if one has some extra cash the best place to keep it is in the bank. However, the recent economic upheaval that saw some financial institutions hitherto believed to be very stable, has demystified the belief that banks are the safest havens for keeping one’s cash. More and more financial scandals are being unearthed about banks and financial institutions which had the reputations of being economic monoliths.

An alternative to banking which may be considered less safe but a quicker means of ‘keeping’ and making more cash is to investing in the stock market or in bonds. The saying which goes that the iron is best beaten while it is still hot may perhaps describe the short term benefits of keeping cash or money in stocks.  One can sell the shares whenever their value appreciates and vice-versa depending on a number of factors. But it is not lost to all and sundry that the stability of stock markets depends on a number of economic, social and political factors.  For example a company’s business down-turn may devalue its worth in the stock market. If this company does not recover in time, the shareholders may lose all their savings. Investing in the stock market is risky, but that which is worth taking.

Starting a small or petty business sometimes is considered a safer way of keeping ‘loose’ cash. There are a number of such small businesses worth looking into. As crazy as it may sound, money-lending is a sure way of growing or keeping one’s cash. Its practicality lies in the fact that you often lend to your acquaintances or people you can always trace. In order to ensure that you don’t run aground in business terms, it is wise to request the lenders to secure their ‘loan’ by keeping with you some of their valuables which may easily be sold for cash in case they are unable to pay back. Electronic goods and cars are good examples of these valuables. Other home businesses include making soft drinks, jam and confectioneries. However, in order to begin a good home business one needs to identify a quick and sure market for their goods.

Perhaps the surest way of keeping your cash is literally hiding it at home, or as they say under your pillow. You can spend, keep or lend it to whomever and whenever you want. This way, you are not bound in any way in terms of time and convenience, how your cash is spent. However, this method of keeping cash is not only risky, but requires a high level of discipline.