What Does Carrying $1,000 Cash For 30 Days Do To You?

Dogs have no money. Isn't that amazing? They're broke their entire lives. But they get through. You know why dogs have no money? ... No pockets. --- Jerry Seinfeld

Money is energy.

The value of money comes from what it does.

What you give, you get back 10 fold.

So carry lots of cash. I've heard this advice several times.

Who Needs Cash Anymore?

I don't use cash much. Do you? I like having a minimum of $100 and a target of $140-$160. That's more than enough for expenditures that don't take credit cards. Or places like taxis where I don't feel comfortable using plastic. I don't use debit cards, following the advice of Frank Abagnale in Stealing Your Life. You may recall that Leonardo Dicaprio played Frank in the film adaptation of Catch Me If You Can. 

Why Not?

In January, pianist-turned-coach Paul Tobey suggested carrying $1,000 for 30 days. That's outside my comfort zone, which is perhaps the point. Your credit card probably gives you a $1,000 of purchasing power. That's not cash. Neither is a $1,000 cheque payable to you. 

You might not carry $1,000 cash if

1. you don't have the money
2. you're afraid of theft (can't trust others)
3. you're afraid you'll make impulse purchases (can't trust yourself)

During the Canadian winter, there's little for an insider to do. So I tried this experiment and ran into an immediate snag.

The Problem

My bank keeps cutting my daily cash withdrawal limit. I'm not a bad risk. These reductions are meant as protection from fraudulent activity. Originally $1,000 got cut to $500 and is now down to $300. Collecting $1,000 means visiting on four different days, which is arduous. Even worse, the bank machine spews $20 bills. Who wants to carry 50 (or more) pieces of germ-infested paper? I stopped making withdrawals after two days, which may negate the results.

The Results

Carrying extra cash has three positive advantages. 

1. You feel more successful (much like wearing better clothing)
   
2. You feel more prepared for opportunities
   
3. You feel more prepared for contingencies
   

I was in Sudbury recently with my friend Mike (whose preteen daughter apparently reads this blog !?!). He likes paying by credit card but couldn't: someone stole the credit card machine from the taxi. I used cash and had plenty left over. This saved us from walking or hitchhiking to the airport in -35C weather.

Other Emergencies

On September 11, 2001, I was in Halifax, Nova Scotia delivering a presentation while planes were crashing into the World Trade Center. We didn't know until an organizer interrupted just as I finished. At that point, we were all numb. How could both towers collapse? What was going to happen next? There was speculation that the phone systems (land/cellular) and the Internet were going to be shut down to prevent the terrorists from communicating. The power grid could be shut down. The financial system could be shut down to prevent terrorists from transferring money. Very confusing. Very hard to tell what would happen next.

In a daze, I got directions to a bank and withdrew the maximum permitted (probably $500). There were no line ups. As events unfolded, I didn't need this extra cash. What if I did? What if the bank was closed or had run out of money? Cash would have come in handy. 

Conclusions

Carrying more cash works. It seems redundant --- like having a 500 horsepower SUV in the city. If you go offroad, you'll be on a paved sidewalk. You don't need the extra speed either. Even so, the potential gives extra confidence and peace of mind. Unlike an SUV, cash is green (at least in America).

Unlike cheques, credit cards or debit cards, cash is universal. If you try this experiment, please share your findings.

Links

• Huh? Fraud Protection and your Bank Card
  
• Protecting Against Identity Theft
• Paul Tobey seminars (generally four hours and free)

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