Just because I have cash at home doesn't mean I spend it. It's put into the safe and left alone. I know many people who don't have that ability. If it's around, they will spend it. I won't. I have money in an IRA and also in a 401k. I can't get to either without penalty because I'm not old enough. So those stay at the broker and at the bank. They are there with the thought that they may not be available in the future.
What's happening in Cyprus has been weighing on my mind. I don't believe that the banks here are going to swallow up the money by taxing what's in there by not allowing you to retrieve it. No, our government gives us the "honor" of preparing our taxes are voluntarily sending it in. But What If? What if on a Saturday the announcement is made that on Monday morning prior to the banks opening the accounts will be taxed between 10 and 70%? They promise to give it back if the banks and the economy get stronger. That's a promise I wouldn't hang my hat on.
Right now my credit union is paying 1/10 of 1 percent. This means if I have 1000 in the bank for the entire year I will earn one dollar interest. $10,000 would earn $10. Or I could take the money out of the bank and have it sit in the safe at home for a year. One less going out to lunch and the $10 is taken care of. I can sack a lunch and put the $10 in the safe as well. There's a year's worth of interest on 10K.
I could invest it in gold or silver coins. I don't own gold but I do have "junk" silver coins. I may invest in some more silver. I'll think about it.
My monthly paycheck goes in automatically. The bills get paid automatically. The extra is coming out. The bank will still have the IRA money in it but the rest will be kept safe in MY safe. How do you get large amounts out? Not too long ago I went to the bank trying to get a large amount in cash. They said it would take three days to fill my order if I wanted more than a thousand. So much for having access to your own money. Today I went to the ATM and took out $500, the limit. Every time I go into town I'm going to hit up the ATM. I'll also stop in and pick up some cash. It may take a few months to get it all out but I want it out.
Have you thought about how much cash money there is compared to what the deposits are? My credit union is considered one of the best in the country. For every dollar it has in actual cash eight people would be standing in line for that dollar. In other words, if 70,000 of their customers came in to cash out their money, in cash, the other 550,000 customers would be left with nothing. That's not comforting.