Published on March 30, 2020

Cash is tangible and having ready access to it is especially reassuring during uncertain times, much like we are all experiencing now.

You may be tempted to resort to a survivalist instinct which will see you hiding your cash under the mattress, burying it in the backyard or hiding it wherever else you deem “safe”, but remember too, safety comes at a cost.

The cash that you keep hidden at home isn’t working for you – it’s mainly giving you peace of mind should you find yourself in an emergency situation.   However, if that money is stolen or destroyed in a fire or flood, it’s gone forever without a trace.   Worse yet, if you forget your hiding place or something happens to you, your family may never find the cash you have so diligently hidden.

There’s a fine balance to be struck between how much cash is too much… it’s equal parts risk and reward to hold on to cash of any amount.   You are essentially putting its earning power into hibernation on the off chance you may need it “someday”.

Nonetheless, it’s a reassuring and practical precaution for everyone to have a cash nest egg – the amount will vary according to your lifestyle and risk profile.   You don’t need to be sitting on a mountain of cash to ride out an emergency.    Consider keeping enough to pay your essential expenses for 3 to 6 months in case you lose your job or expect a drop in income for a brief time.

It’s important to recognise that in the midst of uncertainty, it’s easy to lose focus on your wealth creation plans.   Turmoil can lead to emotional money decisions – impulse spending, hoarding or even a “might as well have fun while I still can” attitude that can erode years of hard work and discipline.

Your wealth creation, in good times or bad, should be founded on a solid plan with goals, timelines, discipline and above all else, diversification.

Money that you invest should be considered a long-term investment, working quietly but tirelessly in the background while you get on with life.   Having passive, regular cash flow from your investments and compounding those returns is an essential strategy that will help you maintain your wealth creation no matter what is happening in the world at large.

As for where to store this cash nest egg? I’ll leave that up to your imagination but I would at least caution you to avoid the more common places.    Spend a couple of minutes researching ideas on the internet – and then make sure you use none of them!    It’s also a wise decision to tell a family member or friend you trust implicitly, where you have stashed your cash in case something happens to you and that hidden nest egg is donated, thrown away, left behind or otherwise lost for all time.

As for your remaining balance of cash, get that working harder to create another passive income stream.  Talk to us about how our Armchair Capital and Armchair Development funds provide a monthly income that a buried bundle of cash just can’t provide for you.

Cash is often thought of as king, but it’s cash flow that will keep the kingdom functioning in the long run.