There are advantages and disadvantages of keeping cash. On one hand, it provides liquidity which is useful in times of emergency. On the other hand, it earns a very low rate of return if you keep it in a savings account. Even investing in a money market fund earns you little more than one per cent. The conventional wisdom is that inflation will erode the purchasing power of cash over time.
| Image credit: Images Money |
Previously I have blogged about setting aside cash for an alternative mission instead of investing wholesale into the market (link
here). There are a few reasons for doing so.
- Mortgage Prepayment
In 2011, my wife and I took out a mortgage to pay for our current HDB flat. In August next year, it will be our fifth year and the end of the lockup period.......
