Cash on Hand || Importance for Individual

@ameerbushra
8 mo (edited)
3 Min Read
655 words

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Cash is the most valuable asset for any business and individual. There is a common well-known phrase for cash that, "Cash is King". The phrase is not an ordinary phrase it has a very meaningful and deep reason. Every firm, business, and individual want cash and it's very important for firms and business to keep cash so, at the time of need, they can be able to protect the business from big disasters.

As cash on hand is not only for businesses it's important for individuals as well. Following are the main reasons why cash on hand is important for any individual:

  • Liquidity: Cash is the most liquid asset.
  • Cash helps to keep your investment diversified.
  • With the help of cash, a person can live with psychological Peace.
  • Helpful in Cash-Only transactions.
  • Helpful in avoiding Interest and other fees.
  • Helpful for Covering unexpected Risks.

Liquidity: Cash is the most liquid asset:
The best thing about cash and that makes it most valuable among other assets is its liquidity. You can buy anything, anywhere or whenever you need it if you have cash on hand. you don't need to wait for the date of maturity, like treasury bonds, you can't touch until the date of maturity. If you have cash on hand, just go to the market and buy or sell anything you want.

Cash helps to keep your investment diversified:
"Diversification refers to speeding your business or investment in multiple fields rather than one that helps to reduce volatility and helps to increase profit".
Diversification helps investors to own a variety of assets at a time that'll perform differently over a period of time and reduce the chances of loss, and there'll be no risk of losing everything at one time if one faces any type of difficulty.
As cash is most liquid so it can be part of your diversified portfolio or investment and surely, it'll provide great stability and security as well.

With the help of cash, a person can live with psychological Peace:
According to research, business and individual having cash on hand live more peacefully ad relax and they face less problems. For example, if you invest all your money in bonds or invest your money in any kind of stocks you won't be able to use that money at the time of need, which is too hurting also the risk of your money is a big threat and of course unpleasant for an individual. In such circumstances, one won't be able to live peacefully.

Helpful in Cash-Only transactions:
Although the world is a global village and almost everything is now computerized, but still there are many transactions that are cash based and you need cash for those transactions.
For example, one day you are tired and you won't be able to go out to take anything for yourself, you order your favorite Pizza for yourself and suddenly you came to know that your favorite Pizza shop is still on cash. what'll you do, it'll be hurting for you.
That's why cash on hand is very important for many transactions.

Helpful in avoiding Interest and other fees:
Paying interest or different fees is always heartbreaking and one always tried to avoid it. having cash on hand is beneficial for avoiding extra fees and interests.

Helpful for Covering unexpected Risks:
Life is full of surprises, sometimes pleasant sometimes unbearable, sometimes cold clouds sometimes burning sun, sometimes ups and sometimes downs. So, at the time of emergency, cash on hand is useful its helpful to solve the problem.

After reading this I'm sure all of you came to know the importance of cash on hand and always keep cash with you.

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