When it comes to currency, our world today is very different than it was 20 years ago. I bet that you wonder where the slang term ‘Cash is still King’ came from. There is no definitive origin of the saying, but many people use it in the investment world. This phrase symbolizes that cash is most valuable – it determines how you conduct business and how well your business is doing can be defined by the amount of cash you have. The big new dog on the block is Bitcoin, but you must have the cash to have Bitcoin. So, is cash still King? Today, people use credit cards, debit cards, and Bitcoin to purchase various items. This generation does not understand the concept of money. Many people feel that money is infinite as long as they can swipe the card and buy whatever they want. I am here to tell you that CASH is still King, and you still need paper money to conduct business.
Modern-day technology has made many of us lazy when it comes to managing our money, investing, spending, and saving. To do these things, you still need CASH. Why is cash no longer relevant today? Society has taught us to do things quickly and conveniently and put everything on autopilot. But we must go back to the foundation, which is cash. If you have a child, how do you explain to them how one should use a credit card? They are not in a position to understand, but if you show a child money, coins, and something they can touch, they will appreciate it. So you must have that childlike faith and go back to the basics of understanding cash, where it comes from, and why you still need it. If you are financially struggling and in debt, look at where all your money is going. Do you have five or six credit cards? Do you have less cash in your savings account but have a $40,000 or $20,000 credit card limit? If you have a substantial amount of credit card debt, then you have lost your way regarding cash. You may feel as if the money on that credit card belongs to you, but it does not. It belongs to Visa, MasterCard, American Express, Discover, or whoever you have as your credit card provider. At any moment, that credit card provider could say that they no longer want you to have that credit card and could cut off your limit, and then you owe all that money to the credit card company. With interest in overtime, you will end up paying out more money while making the credit card company rich and not you.
I had the pleasure of knowing people with money who are well off, and all of them say that they have little-to-no debt and have more liquid cash in the bank. They are now financially free to do the things they want to do because of the money they have. It was funny to learn that when many of them did use their credit cards, it was to make purchases to earn points so that they do not use their cash when they travel but have the money to pay the monthly bill. They are using the credit card to be a part of the game. They are not using credit cards, Bitcoin, or any other type of credit line to maintain their lifestyle.
They learned early on that cash is better than credit when making big purchases; for instance, when they had to buy a car, it would cost them less. The same car we would finance, it would cost us $50,000. They can buy it in cash for $35,000; why is that? When you are making a deal, and someone knows that you are coming with cash, they know that it is guaranteed money they will get up-front. When you finance anything, it can be damaged via fire, accident, flood, or wind. The cash they know is in their hand and it is still King.
Here are five reasons why people struggle with using cash and instead use credit cards:
- Cash is too easy to spend
- Money is too easy to lose
- Money is too inconvenient to use
- Most places you go to are cashless
- If someone robs you, they cannot take any cash from you
It is a good practice to have a balance when it comes to cash and using credit cards. You must adapt to the world we are in and the ever-changing technology. Keeping your core foundation will keep you grounded; it will save you where you can achieve your goals and not conform to what others say you need to do; you do what is best for you and your family. Cash is still King because if you purchase an item with cash, you would pay $300, but if you finance it, it would cost you $600. So, which direction do you go, cash or credit? Many will struggle because they want things immediately, instead of saving the $300.
Strengthen your relationship with cash, have a healthy credit score, and have more money in your bank account than on your credit card.
Beware, be informed!