2 Reasons To Keep Plenty of Cash OUTSIDE of The Bank

“How much cash do you have at home?” I once asked a friend who is an extremely smart investor and businessman.

(The question wasn’t too personal… He’s a good friend and we talk about money. I had dinner with him at his home earlier this month in California.)

I keep six figures at home,” he replied.

“Wow!” I said. “That sounds a bit extreme.”

“Is it?” he asked. “How much are you earning in interest in the bank?”

I saw where he was going with this… You earn basically zero interest on your money in the bank, and zero outside of the bank. So there’s not much harm in holding cash outside of the bank. You’re simply diversifying where it’s held.

He also reminded me that it’s surprisingly hard to get large amounts of cash out of your bank. He was right again…

Have you tried taking a large amount of money out of the bank recently?

I took $5,000 in cash out of the bank a couple weeks ago – and the bank struggled to find it. The tellers actually told me, “Sir, if you need to take this kind of cash out of the bank in the future, it’d be better if you’d give us a few days’ notice.”

Really? My local bank branch struggles to come up with $5,000 in cash?

Yes – and that’s not the first time that has happened to me at this bank branch. (It’s a branch of one of the largest banks in America.)

What if I wasn’t the only person that day who wanted a large amount of cash? How much of YOUR money do you really think the bank would give you on that day?

I’ve never considered holding a large amount of cash (except for a brief moment during the crisis in 2008). However, my friend makes some good points:

  1. You earn zero interest in the bank and zero outside of the bank… So why not hold some cash outside of the bank?
  2. If the banks run out of cash (or shut down for a few days), then you’ll have no cash. You are essentially broke at that point.

This happened recently in Greece… One day the banks were open, the next day they were closed. And they stayed closed for three weeks.

While an extreme crisis like that is unlikely in the U.S. today, it is possible in the future. Meanwhile, there’s little downside in holding extra cash outside of the bank today.

The bottom line here is you ought to hold way more cash than you think… Think of the number you believe is right… and then consider ADDING A ZERO TO IT!

Good investing,

Steve

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About the Author: Daily Crux

  • JohnDille

    IT IS BASIC POLI SCI 101…. THERE IS THE RIGHT WING… CONSERVATIVES… DEFENDERS OF THE RICH AND POWERFUL… OR THERE IS THE LEFT WING… LIBERAL REBELS WHO FAVOR ORDINARY PEOPLE OVER THE RICH AND POWERFUL!!! THE BIRD HAS 2 WINGS… A RIGHT WING AND A LEFT WING… ALTHOUGH IN THE CASE OF DIMWITS LIKE YOU… THE BIRD HAS A BRAIN… A BIRD BRAIN… AND THAT SEEMS TO BE WHY YOU ARE SO INCAPABLE OF UNDERSTANDING THE CONSERVATIVE/LIBERAL;… THE RIGHT/LEFT, PARADIGM, THAT IS WIDELY USED BY ALL WHO STUDY ANYTHING RELATED TO POLITICS… WHICH IS PRETTY MUCH EVERYTHING! I GUESS THAT IT IS SAD THAT YOU DROPPED OUT OF THE FOURTH GRADE BEFORE THEY COULD TEACH YOU THAT VERY BASIC CONCEPT!!! IT IS SO WIDELY USED FOR THE SAME REASON THAT THEY TEACH THE LAWS OF GRAVITY AND THAT SORT OF THING… IT WORKS… VERY WELL!!!

  • The Observer

    Where do you come up with this stuff? Most of the population of the planet have nothing to do with your cute little democrat/republican con game, yet because I choose to be one of them it makes me a rich, evil, dictatorial, thieving abuser of everyone else? Not much that I can at this point other than to laugh at you and the bitterness that runs through your veins.

  • JohnDille

    SO…. YOU LIVE IN YOUR OWN LITTLE GATED COMMUNITY… SET APART FROM THE REAL WORLD, SO YOU DO NOT HAVE TO PUT UP WITH ALL THOSE REPUBLICRAT SLOBS AND LOSERS??? YOU AND YOUR SUPER RICH NEIGHBORS CONTROL YOUR LITTLE WORLD, AND KEEP THINGS JUST TO YOUR LIKING… SORT OF LIKE WEALTHY SOUTH AFRICAANERS SHUT OUT THAT NASTY WORLD WHERE ALL THE BLACK FOLKS AND POOR WHITE FOLKS LIVED!!! AND YOU RICH WHITE FOLKS GOVERNED YOURSELVES…. HOW??? OH, YEAH… BY CREATING A DICTATORSHIP THAT ROBBED EVERYONE ELSE, TO MEET THE NEEDS AND WANTS AND THE DEMANDS OF YOUR ALL WHITE WEALTHY COMMUNITY… THAT’S HOW!!! OF COURSE… YO9U DO NOT LIVE IN APARTHEID SOUTH AFRICA… BUT YOU APPARENTLY LIVE IN… OR WANT TO LIVE IN… AN AMERICA VERSION OF THAT SYSTEM…. WHERE DICTATORS DELIVER WHAT YOU WANT… AT THE EXPENSE OF EVERYONE ELSE… AND ANYONE WHO DOES NOT WANT TO LIVE BY THOSE SAME RULES… ARE WELCOMED TO LEAVE…. AT THE POINT OF A GUN!!! SOUNDS REALLY WONDERFUL… REALLY AMERICAN… REALLY DEMOCRATIC!!! NO WONDER YOU RIGHT WINGERS LOVED HITLER AND NOW LOVE TRUMP…. BOTH WERE JUST WHAT YOU WANTED!!!

  • The Observer

    Uh, not supporting either wing of your beloved system is also considered having a political point of view, at least in the world of those who like to do their own thinking instead of allowing politicians to do it for them.

  • JohnDille

    IF YOU DESPISE DEMOCRATS AND LIBERALS… AND ARE NOT LOYAL TO THE FAR RIGHT… THEN JUST WHERE DO YOU SIT ON THE POLITICAL SPECTRUM… BESIDES ON THE FENCE??? WHICH SIDE ARE YOU ON, BOY… WHICH SIDE ARE YOU ON??? THAT’S THE PUNCH LINE FROM AN OLD COAL MINERS UNIONIZATION SONG, BY THE WAY! YOU RIGHTIES AND FENCE SITTERS WOULD NOT BE MUCH AWARE OF THAT LIBERAL DEMOCRATIC HISTORICAL REFERENCE, MOST LIKELY!!!

  • The Observer

    Please cite one post that I have typed where I have expressed gratitude to any billionaires. After you have failed at that please cite one post in which I have expressed any loyalty to any right wing politicians. Good luck.

  • JohnDille

    THIS WILL PROBABLY COME AS A TOTAL SHOCK TO YOU AND YOUR FELLOW BRAIN WASHED REPUBLICANS… BUT DEMOCRATS DO NOT VOTE FOR DEMOCRATIC POLITICIANS IN ORDER TO SECURE… GOODIES!!! THAT IS A REPUBLICAN THING TO DO… AND REPUBLICANS PROVIDE THEIR RICH SUPPORTERS WITH WELL OVER A TRILLION DOLLARS WORTH OF GOODIES EACH AND EVERY YEAR… AND THAT DOES NOT COUNT STUFF LIKE FEDERAL CONTRACTS WORTH TRILLIONS MORE! DEMOCRATS VOTE FOR DEMOCRATIC POLITICANS FOR ONE REASON AND ONE REASON ONLY… AND THAT IS… THEY ARE NOT REPUBLICANS WHO SUPPORT THE RICH… AND ONLY THE RICH… AND THE PREDATORY ACTIONS OF THE RICH… WHO GOT THAT WAY… WITH THE FULL SUPPORT OF THE REPUBLICAN PARTY…. BY CHEATING AND RIPPING US OFF AND BULLYING US AND EXTORTING US AT EVERY TURN!!! AND IF YOU CANNOT UNDERSTAND HOW IT IS THAT RICH REPUBLICANS ARE EXTORTING AND CHEATING AND ROBBING ALL THE REST OF US BLIND…. THEN I WOULD SUGGEST THAT YOU GET OUT INTO THE REAL WORLD… AND TRY TO MAKE A LIVING AS AN ACTUAL WORKING PERSON!!! THE ONLY INCENTIVE FOR WORKING THESE DAYS… FOR A SOLID MAJORITY OF AMERICANS… IS THAT THE ALTERNATIVE IS TO STARVE ON THE STREETS. JUST BARELY SURVIVING IN THE HOUSE YOU ARE RENTING… OR TRYING TO BUY… BECAUSE YOUR WAGES ARE TOO FREAKING LOW… IS NOT ANY DEMOCRATS IDEA OF LIVING IN A RICH NATION!!! AMERICA USED TO BE RICH… AND EVERYONE HAD A DECENT SHOT AT DOING WELL!!! THEN YOU FREADKING STUPID REPUBLICANS TOOK OVER… AND NOW… ONLY THE RICH AND UPPER MIDDLE CLASS DOES WELL… AND YOU UPPER CLASS FOLKS DO WELL… BY CHEATING ALL THE REST OF US VIA LOWER WAGES FOR EVER MORE WORK… AND BY CHARGING US MORE AND MORE AND MORE FOR BASIC GOODS AND SERVICES… JUST TO MAKE YOUR BILLIONAIRE STOCK AND BOND HOLDERS HAPPY! WELL… SCREW THAT REPUBLICAN MODEL!!! ONLY THE RICH, AND THE COMMUNIST CHINESE, DO WELL UNDER REPUBLICAN RULE…. AND THAT IS WHY WORKING PEOPLE AND INTELLIGENT PEOPLE VOTE FOR DEMOCRATS. OBVIOUSLY YOU, LIKE MOST REPUBLICANS, ARE NEITHER OF THOSE!!!

  • Gary Parker

    John, you and the other Democrat liberals (sorry…”progressives”) are so terribly ill-informed, on purpose, by your Democrat puppet masters. They have taught you and your kind that they will provide you with this, that, and the other things…so long as you sell your votes to them so that they can continue to grow the Federal government and retain their control over your souls. And frankly the elite Republicans are not much better. Both the Democrats and Republicans currently in office will do almost anything to maintain their gravy train. Thus Trump. As for your reference to Hitler and Mussolini, the obviously Democrat-organized and run trash that continue to assault Trump supporters and police while burning the American flag and waving the Mexican flag remind me a lot of what I have read about Hitler’s SA.

  • JohnDille

    IT NEVER GETS OLD WATCHING YOU RIGHT WING REPUBLICANS EXPRESS YOUR GRATITUDE TO YOUR BILLIONAIRE MASTERS FOR ALL THAT THEY HAVE STOLEN FROM YOU, AND FOR THEIR ABILITY TO TOTALLY CONTROL AND MANIPLULATE YOUR LIVES… WHILE BLAMING ALL OF THAT MANIPULATION ON THE GOVERNMENT AND ON DEMOCRATS!!! I WOULD THINK THAT… AFTER A WHILE… YOUR LIPS AND NOSE WOULD FALL OFF FROM ALL THE BROWN NOSING AND REAR END KISSING YOU RIGHT WINGERS DO!!! AND TO THINK THAT YOU GET SO LITTLE OUT OF YOUR EFFORTS!!!

  • Mike

    What historical references don’t you understand Jack?

    In the last 100 years there have only been TWO Stock Market Crashes and Depressions……

    1929-1932 Stock Market Crash and Depression with Hoover, a Republican and a Republican Majority Congress after a period of Republican dominance… Saved by FDR a Democratic President and a Democratic Majority Congress

    November 2007-2009 Republican Stock Market Crash with Cheney/bush and a Republican Majority Congress after a period of Republican dominance….. Saved by a Democratic President (Obama) and a Democratic Majority congress

    Those clear enough for you Jack?

  • The Observer

    It never gets old watching you, Mike, and the rest of the babbling rabble whine, complain, and blame everyone else because you have not been able to save any money, when your entire retirement plan has been based on some lying politicians telling you that they would take care of you. Good luck with your government servitude.

  • jackrussell

    Mike, a few misplaced historical references won’t impress the uninformed enough to make it worth how I’ll-informed it makesYOU look to thise who actually pay attention.

  • JohnDille

    THE REPUBLICANS AND SO CALLED INDEPENDENTS OF TODAY ARE NOT NEARLY AS SMART… OR WISE… AS MOST OF THE REPUBLICANS AND INDEPENDENTS OF THE EARLY 1930’S!!! THE MORE THAT THE REPUBLICAN ELITE ROBS THEM AND CHEATS THEM AND BULLIES THEM AND KICKS THEM AROUND, THE MORE THAT THE REPUBLICAN PUPPETS OF TODAY WILL SUPPORT EVER MORE EXTREMIST REPUBLICANS!!! THE HUGE POPULARITY OF DONALD TRUMP AMONG TODAY’S REPUBLICANS IS A CLASSIC EXAMPLE OF THAT SORT OF PATHOLOGY… AND IS SURELY THE SAME KIND OF PATHOLOGY THAT BROUGHT HITLER AND MUSOLINI TO POWER BACK THEN!!!! SURELY SOME GOOD PSYCHOLOGIST COULD TELL US WHY THAT IS…. BUT I THINK THE STOCKHOLM SYNDROME MIGHT BE APPLICABLE!!! IN THAT CASE, A KIDNAPPER HELD HIS HOSTAGES FOR SOME LONG PERIOD OF TIME… AND AFTER A WHILE, THEY BEGAN TO SIDE WITH HIM AND TO SUPPORT HIS CRIMINAL ACTIONS!!! OR SOMETHING LIKE THAT!!!

  • Mike

    Yep, we forgot how disastrous those Republicans were in the 1920’s and we let them back in with Reagan in 1981…… So comes the question: How long will it take the millions of Americans who have been conned and screwed by the Republicans to again throw them out for another 60 years, aye?…. 🙁

  • JohnDille

    WHY IS THIS ARTICLE EVEN NEESSARY???? FOR MOST FOLKS, KEEPING IT ALL IN YOUR POCKET IS STANDARD PROCEDURE! A NEAR MAJORITY OF AMERICANS COULD CONVERT THEIR ENTIRE LIFE SAVINGS INTO 20 DOLLAR BILLS, AND CARRY IT AROUND IN THEIR SHIRT POCKETS, AND IT WOULD BE HARD TO EVEN NOTICE THE BULGE!!! AS RECENT RESEARCH HAS SHOWN… A SOLID MAJORITY OF AMERICANS COULD NOT COME UP WITH EVEN $ 400 IN CASH, UNLESS THEY BORROWED IT, OR SOLD SOMETHING!!! AND NEARLY 70% COULD NOT COME UP WITH A THOUSAND DOLLARS IN CASH, WITHOUT SELLING SOMETHING OR BORROWING IT!!! THE MINIMUM WAGE IS NOW 40% BELOW WHAT IT WAS BACK IN FEBRUARY 1968… ADJUSTED FOR INFLATION OF COURSE… AND SINCE MORE THAN 40% OF ALL THE PEOPLE IN THE USA WORK FOR WAGES THAT ARE DIRECTLY TIED TO THE MINIMUM WAGE… AND ANOTHER 25 TO 30% FOR WAGES THAT ARE STRONGLY INFLUENCED BY THE MINIMUM WAGE… MANY TENS OF MILLIONS OF PEOPLE HAVE BEEN ROBBED BY THE RICH, VIA THE MUCH MUCH LOWER WAGES THEY HAVE BEEN GETTING PAID, RELATIVE TO WHAT THEY WERE EARNING WAY WAY BACK IN THE 1960’S… WHEN THOSE EVIL DEMOCRATS RAN THINGS!!! AND THIS MASSIVE THEFT OF WAGES IS HAVING PROFOUND CONSEQUENCES… AMONG THEM THAT A LARGE MAJORITY OF AMERICANS ARE JUST FLAT OUT BROKE… OR ARE AT LEAST CASH POOR… AND THE US MIDDLE CLASS IS QUITE LITERALLY FADING AWAY… WHILE THE US UNDERCLASS HAS MORE THAN DOUBLED IN SIZE JUST SINCE RONALD REAGAN TOOK OFFICE!!! RAISE THE BLANK BLANK BLANK BLANK MINIMUM WAGE AT LEAST BACK TO WHAT IT WAS IN 1968, REPUBLICANS… AND YOU WOULD LIFT AT LEAST 20 MILLION PEOPLE OUT OF POVERTY, AND DRAMATICALLY REVITALIZE THE US MIDDLE CLASS, VIRTUALLY OVER NIGHT!!! BUT… OF COURSE, REPUBLICANS WOULD RATHER BORROW FROM THE RICH, AND PAY THEM TENS OF TRILLIONS IN INTEREST,,, AND CONTINUE TO USE THAT BORROWED MONEY TO KEEP PEOPLE AFLOAT, INSTEAD OF HAVING CORPORATE AMERICA AND THEIR RICH REPUBLICAN OWNERS DO THE RIGHT THING!!! A HOLE REPUBLICAN THEIVES AND CRIMINALS AND TRAITORS!!!!

  • berky

    the hardest part is convincing your spouse that it’s a good idea.