Keeping Cash on Hand: 5 Reasons Why You Should Do It
Keeping cash and more cash. How much cash should you have access to? Do you remember the Greek Banking Crisis that took place in June and July of 2015?
The Greek government literally closed banks, imposed capital controls and limited access of Greek Citizens own money from the banking system!
Of course, that could never happen in North America, correct? Here are 5 reasons to keeping cash on hand anywhere from $2000 to $5000 safely in your home.
1. Banks can fail!
Do you remember the financial crisis of 2008, systemically an international problem? Do you understand truly what a stress test is on our banking systems?
In December of 2016, Wells Fargo failed for the second time its “living will” stress test. With our fractional reserve banking system, it is unlikely that any bank can truly handle all the stresses at the same time.
While most banks in America have passed the most recent modality on stress testing, it would not appear that the stress tests are performed with another “Black Swan” event. Meaning several or all of the stress triggers acting on the system at the same time.
This is like 8 bad guys attacking the hero in the movie one at a time. Of course, the hero will win, but not with all of them at the same time.
2. Banking information compromised
It is not unreasonable in our society to assume that your credit card or debit card usage and login information could not become compromised. By compromised we mean that you have to place a stop usage on the card or cards.
This could take some time to fix, including canceling the card and requesting a new one.
By keeping cash at home or having access to cash anytime, you can take care of your necessary daily living expenses while this situation gets resolved. With anywhere from $2,000 to $5,000 cash available to you, you can at least know that your life will not stop just because your credit or debit cards are not working.
3. Identity theft
Taking the above a step further, one’s entire identity could be compromised as well. This could take an extended period of time to unravel. We all know that this happens to other people but never you, correct?
The truth is that anyone at any time can have their identity stolen. If can be as simple as using the Wi-Fi at your local coffee shop. The possibility that you could become an identity theft victim is relatively high.
Having that extra cash around will help you take care of life while you untangle this situation as well.
4. Natural disasters
Anyone can live anywhere and experience a natural disaster in their locality. This will be especially true if you live in tornado or hurricane or earthquake zones, flood zones, or even major winter storm areas.
Of course, one could argue that a natural disaster may make it difficult to even get to your cash.
However, having a good secure home safe will help. One thing is for sure, a major disaster could shut down electronic financial transactions in your locale for a period of time.
Having access to cash will give you some sense of security to get your necessary items needed for daily living.
5. Peace of mind
Lastly, keeping cash or having access to the sum of money we discussed can give you peace of mind knowing that you have a plan B when it comes to your ability to purchase that which you need on a daily basis.
General George Patton, the famous World War II military leader stated to always have a plan B. Having cash on hand available to you is having a plan B at your disposal.