You’ll need that money in hand right away. While businesses may have 90 days, when you find yourself in the midst of a regional power outage and in search of emergency supplies, 90 days isn’t good enough. We’re talking dollars and cents in the most literal terms. But for our purposes, cash literally refers to the money in your wallet, purse, glove compartment, junk drawer, safe, and mattress. However, from this perspective, cash simply refers to the assets available to you when you require funds with immediate liquidity, as might be the case with a struggling business. Treasuries, and ETFs and even personal effects with meaningful market value like automobiles, jewelry, and appraised collectibles. In other words, says Due, money in your savings, checking and money market accounts money invested in liquid financial products like stocks, bonds, U.S. According to Due, in business terms, cash can refer both to the literal cash at your disposal and to any asset that can be readily converted into cash within the space of 90 days. The term cash can be somewhat more expansive in meaning than simply the sum of bills and coins in your pocket. When we say at all times, we mean that it is advisable to keep a modest sum of cash on hand as well as a modest sum in your car if you drive one regularly, as well as keeping a more substantial sum of cash stored somewhere safely and discreetly in your home. However, it is advisable that you do have immediate access to a stash of cash at all times. Your bank would not likely appreciate receiving your monthly mortgage payment in stacks of $10s and $20s. Of course, it is neither practical nor possible to exist in a world of cash only. In other words, you can still carry out basic economic actions….buying, selling, paying off your debt, or putting food on the table without using a credit card or taking out a loan.”Ĭash affords a type of liquidity that remains pertinent even in times of economic uncertainty and sociological calamity in a way that, according to Due, makes it the single most valuable asset that an individual or business can possess. Due explains that liquidity refers to the ability to “meet your obligations without taking without incurring a loss. That’s because cash retains a liquidity that no other asset can match.
There’s a certain independent financial security in keeping an emergency stockpile of dollar bills at your ready disposal that simply can’t be replicated by any other method of payment. Well, it turns out there are actually a lot of really compelling reasons to keep a healthy supply of cash on hand at all times. So what’s even the point of cash if you’re not running an underground gambling ring? And of course, we do so much of our shopping, bill-paying, and socializing online at this point that most of our payment information is just saved in our computers and smartphones. We even live in a universe where a mysterious thing called blockchain contains virtual tokens that we actually exchange as currency. We split dinner bills with our friends using instant cash exchange apps like Venmo. We make day to day purchases using debit cards. In a lot of ways, we’re living in a post-cash era.
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