Why Cash Is An Important Part Of Your Portfolio

Hey Jessinvestors

If you've read any of my posts over the past 2 years or so, you'll know I have a growing disdain for cash, but it doesn't mean I don't see the value in it. I hold cash, not as store fo value that's for sure, but a unit of account and network it's a great toolbar none.

Cash has it's the purpose it's a medium of exchange, it as near-infinite liquidity, and is hardly ever denied in terms of exchange. It's accepted almost everywhere; there are very few nutters who would turn down a crisp bill or my plastic card.

I need cash, we all need cash

I need cash for certain things, like bills and living, as everyone else does, but am I willing to hold something that's going to zero?

Not a chance!

Every country is in a different stage of the inflation and debasement race and for myself here in South Africa, you need to be a damn Olympic sprinter to keep up. I've had to eat losses for years and take the knock to my savings since around 2016 when I discovered Bitcoin.

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Keep dry powder on hand

If you have a job, a business or investments that are kicking off free cash flow and you're not ready to reinvest or looking for new opportunities and don't want to pull the trigger sure you can hold cash.

That's what I do, I build a little reserve each time, I leave it in a money market, or savings account to cover my banking fees and reduce the damage from inflation slightly as I wait for a good deal.

As I've mentioned before I am starting to take a back seat in the stock market as I don't have the temperament for what's going on here. The volatility is not worth my stress, and I'm going to need a serious repricing of assets before I jump in.

I could be wrong, and stocks continue to surge while cash crumbles, but it's a risk I am willing to take. Cash also allows me to invest in other opportunities while I wait. It could be something simple, like buying products that are liquidated form businesses and reselling them.

Having that dry powder on hand, to pull the trigger on deals gives you so much more confidence, you don't need to rely on instant finality for many of these deals, and the time it buys you is vital in getting the best return.

Kicking off cash flow means you can stack sats

Let's face it the world runs on debt, debt to some is as good as cash, cash is in itself a debt instrument. However, it's not about having cash but rather cash flow. If you have a job, a business or investments dropping regular cash flow into your pocket, you can use some of that to stack sats.

While others are paying off mortgages, auto loans and credit cards, you convert your cash into Sats, or rather that's what I've been doing.

Cash is great in a deflationary trade

The world is a place of nuance, and while inflation rules the roost on many things you may want to buy, there are deflationary forces at play. If you find a market where deflation is taking hold cash is an awesome tool, you can use it to pick up assets as the relative buying power of your cash keeps rising against these assets.

So in short, I don't like cash, but I do value what it offers me!

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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