On... Cash is Trash

Cash is Trash. Everyone knows that, even my mom and mom in-law who are not financially educated knows that.

Of course 'Financially Educated' is a very subjective term. In this case, I'm talking about people who doesn't know anything about investing and thinks the best thing you can do with your money is to put your money in the bank (to be fair, some people know about investing but they think its safer to put your money in the bank - Im not talking about those people). If my mom in-law thinks Cash is Trash, then why did she keep her money in the bank? Isnt that keeping cash?

In my opinion - no. I think money in the bank is not cash. This is just my opinion by the way. I've not done a research on the definition of Cash, etc. And my mom in-law and mom doesn't put al their money in the bank. They actually park a good portion of them in the EPF (Employee Provident Fund) - a type of retirement fund in Malaysia.

I consider (rightly or wrongly) cash as money under your pillow or buried in your back yard. Or cash that sits in your checking account. A place where you put your money and it doesn't earn any yield. Other than that, I would think you're parking your money in some sort of Bond.

Normally people think of bonds as Corporate Bonds, where you loan your money to a company with an agreed interest rate and holding period or Government Bonds/Treasuries where you loan your money to the Government with an agreed interest rate and holding period. Isn't that similar to a Fixed Bank Deposit? Technically or Definition wise it might be different, but in principal, isn't the execution the same? You put your money in a Fixed Bank Deposit and it has an agreed interest rate and holding period.

Most of my mom and mom in-laws money sit in a Fixed Bank Deposit or in the EPF (this in itself is an interesting discussion for a later date). I consider those as Bond investments. So, no one really holds cash - even the 'Financially Uneducated'.