Have you ever considered what is cash? We all have some….
It could be in our wallets. In our purse. In our bank accounts. Or sometimes, in my case, in my trouser pocket that accidentally gets thrown in the washing machine. It gives a whole new meaning to money-laundering.
At its most rudimentary, cash is a medium of exchange. It is a convenient way for us to buy and sell things without having to resort to the tedious task of bartering. So, cash is, undeniably, useful.
But does its usefulness extend to holding it as part of our investments?
That would depend. The problem with cash is that it can lose its buying power because of inflation….
…. A two-dollar bill, for example, will still look and feel like a two-dollar bill in five years’ time. But if consumer prices are rising at 2% a year, that $2 will only buy us $1.80 worth of stuff after five years....