Holding money simply means keeping your money with you without investing it. When we invest our money, we get returns either as interest for lending out the money to other people or as profits for investing the money in a business venture. Despite these glaring rewards for investing money, many people still choose to hold their money. They have their strong reasons for doing so. These reasons are now discussed below.
1. Daily needs
People hold their money to be able to meet up with daily needs and spending of life. They transact on daily basis to keep the regular demands of the household satisfied. With this in mind, they tend to hold their money since money invested will not be available to meet up with these demands.
2. To safeguard unforeseen financial needs.
People hold their money to enable them prepare for any unforeseen financial needs that are not currently known or expected. When they fall ill, get involved in accident, have litigation matters, etc. they need to meet up with the financial needs of such events. And the only way they feel they can be prepared for these is to hold money for such eventualities.
3. Opportunity comes but once, so says a business minded person. People hold money to enable them take advantage of business opportunities when they come. For instance, if someone has an urgent need to sell off his car be bought for $15,000 at a price of $1,200 for whatever reason, people who hold money can buy the car and sell at great profit. It is speculative attitude of holding money.
1. Daily needs
People hold their money to be able to meet up with daily needs and spending of life. They transact on daily basis to keep the regular demands of the household satisfied. With this in mind, they tend to hold their money since money invested will not be available to meet up with these demands.
2. To safeguard unforeseen financial needs.
People hold their money to enable them prepare for any unforeseen financial needs that are not currently known or expected. When they fall ill, get involved in accident, have litigation matters, etc. they need to meet up with the financial needs of such events. And the only way they feel they can be prepared for these is to hold money for such eventualities.
3. Opportunity comes but once, so says a business minded person. People hold money to enable them take advantage of business opportunities when they come. For instance, if someone has an urgent need to sell off his car be bought for $15,000 at a price of $1,200 for whatever reason, people who hold money can buy the car and sell at great profit. It is speculative attitude of holding money.
Comments
Post a Comment