Tag Archive: cash

Weekly Thoughts 09 June 2017

Possibly the four most useful and simple terms in investing could be cash, capital, yield and return. This week I’ll talk cash and capital.

Cash is basically what funds our daily existence. Whether we use this tool via a credit card, an EFT or have a pile of blue, brown and green notes in our pocket, it is only cash that can be used to buy the stuff we want or need. It is the lack of cash that causes individuals and businesses (or governments) to get into financial difficulty. To me, we want a fair amount of our investments to have the ability to pay out cash. Otherwise how do we use them….?

Capital, is the term we can use to describe accumulated wealth. It could be cash, either in the bank or what you store in a box in your ceiling. It would include the value of your listed investments. We’d measure this total accumulated wealth in one or other currency, like US Dollars, Rands, Pounds etc. One point here is that the value given to listed investments is notional, because the actual value of an investment is only known with certainty when it is sold out and cash is received. Like the value of a property – pure speculation until cash is in the bank.

On Monday I am off to Cape Town. Initiated because of an invite to take up an opportunity to spend a day at Coronation Asset Manager’s Head Office, with all the honchos of the establishment. They only invited 60 advisers from around the country to come to this, an invite list that I seemed to made my way onto. It will be good. I like doing the corporate due diligence with an asset manager. Important to do. We have to pay our own way: we are not allowed to receive any gift or ‘sponsorship’ greater than R1000 per year from any corporate we might or might not work with. A good rule this.

I have also set up a morning at Foord Asset Managers, who also have their Head Office in Cape Town. This will be just myself with their MD, a chap who has got to know me personally. I will do much the same with him on Wednesday morning, just more personal.

Weekly Thoughts 23 September 2016

What I write about here is a simple and maybe practical thing that some folk might find helpful. Do you ever, for example, book tickets over the internet for a show using your credit card and end up booking for 10 other people? This seems to happen almost every month to me. Not expensive shows, but nevertheless little shows or music recitals at schools or the like here and there. We regularly end up doing these bookings for friends or groups at the same time, which means I often land up doing the block booking with my credit card. Then do you ever think that when you’re paid back by the folk you’ve booked for, which is usually in cash, that the money never seems to get back to the place you paid it from? You end up seeming to have spent it on something else that you might not have bought if you didn’t have cash on you. Or it feels like you don’t even quite get paid back. If I’m paid back by EFT, then I simply transfer the money back to my credit card, which you should go and do. It’s the concept of all this that often plays on my mind, the concept of my money allocation and the different places I keep it and manage it from. Cash just seems to go away.

Well, if this strikes a note with you, what I do in these events is put this cash aside in a separate place in my wallet or car and I make sure I use it for petrol, something I would have had to buy anyway. I don’t let myself use it for anything else and I don’t regard it as disposable cash in my wallet. It’s a long time since I’ve deposited cash into my account so this works for me. As I said, maybe a practical money movement tip for the benefit of someone.