The importance of cash....

[cobafdek]

Stock options paid for in cash?  Really, that's crazy. 

 

In the doctor's lounge at the hospital, this line could be rephrased as "A patient stalked out of the office today because my front office staff asked for payment.  Imagine that:  asking for payment at the time of service!  Outrageous!"

 

In my office, I don't take Medicare assignment (accept checks from Medicare for medical service rendered).  Medicare allows docs a status called non-assignment, where patients pay upfront at the time of service (cash preferred, of course), and the patient is the one who receives direct payment from Medicare.  I'm in the minority, whereas most practices charge patients hardly anything, and bill a third-party ("insurance" company or Medicare) for the bulk of the charges. 

 

It's one tactic I use to cherry-pick among the patient population.  Patients willing to see me despite this billing policy are of a different breed from those who expect someone else to pay for their care.  It's also good for the patients, because it keeps me on my best behavior to provide quality service, with no temptation to game the system and charge "whatever the system will bear."

 

(Payment at time of service means cash, check, or card - a bit off-topic, but you get the idea.)

[NeverLoseMoney]

Personally I like using cash, because I believe handing it over to others triggers pain mechanisms in the brain which will keep my consumption in check. Paying with a credit/debit card is different for me. Casino's like to exchange people's money for chips partly because chips flow more easily.

 

Also cash is robust as Nassim Taleb uses the term. Technology is often fragile and with increasing user adoption, the network effects become stronger every year, increasing risks that have not surfaced before. A large bank in my country (The Netherlands) suffered from a major DDoS attack a few years ago, leaving me unable to access my online account for a few days. A family member had trouble accessing a widely used government system called DigiD for about a week, also due to DDoS attack. A lot of stuff is now tied to DigiD here, it is basically your online identity for the government and required to request all sorts of documents and services. These were relatively minor annoyances, but I do wonder how dependable these systems really are.

 

Traditional, physical and often paper-based systems are being dismantled to save costs, leaving us more and more dependent on a single system with no backups in place, creating a single point of failure. I don't worry too much about cash in this regard, but it is happening all around us and will lead to some major problems.

 

Here is a relatively recent example from my country. The article is in Dutch, but Google Translate will do a reasonable job for those interested: http://www.nu.nl/binnenland/4017331/luchtalarmsirenes-gaan-definitief-verdwijnen.html . It basically says our government has decided to stop the use of air sirens in a few years time. These sirens are tested briefly every month and that can be a bit annoying:

:). They exist to warn people in the event of a major disaster. They are now deemed obsolete, because people can be warned through SMS, social media, radio and websites. The estimated savings: €3.6 million / year. I think this is a boneheaded decision. I would like to keep certain backup systems in place, especially those needed when disasters occur. Hell, I'd like a designated guy to start hand-cranking some siren on a nearby hill in case the other systems fail, but perhaps that is a bit too much.

 

The first things to become unavailable when a major disaster occurs are mobile networks and certain major websites. When nothing happens for a long time, people become complacent and only see the benefits of new technology, which are great and wonderful. They tend to forget that certain legacy systems have proven their worth and can be essential to keep around, even if it costs some money to maintain and doesn't seem to ever be needed.

[alwaysinvert]

I personally absolutely loathe having to deal with cash, especially coins. We have had a new design on notes for half a year or something and I have yet to hold a new one in my hand. I also only use debit card. Not eligible for credit and I'm not sure I would use a credit card even if I was. Luckily, you can easily get by here using only card for 98% of all transactions.

 

But I do think this reduced used of cash in general could be a very serious democratic and freedom issue. The fact that cash can be used to avoid taxes is actually a good check on government reach and overtaxation. And of course there is the whole surveillance problem.

[valueinvestingideas]

This thread is especially interesting to me since I own a position in DirectCash, an ATM operator.

 

I do some hard money lending. Most people pay me back in cash, some do post-dated cheques. A select few will to electronic transfers, but let's face it. If you're borrowing money from a guy rather than a bank, you're not very financially savvy. These people deal in cash. They barely have bank accounts.

 

 

Would be interested to hear more about your business, if you don't mind sharing. Where do you find clients etc?

[John Hjorth]

This thread is especially interesting to me since I own a position in DirectCash, an ATM operator.

 

I do some hard money lending. Most people pay me back in cash, some do post-dated cheques. A select few will to electronic transfers, but let's face it. If you're borrowing money from a guy rather than a bank, you're not very financially savvy. These people deal in cash. They barely have bank accounts.

 

 

Would be interested to hear more about your business, if you don't mind sharing. Where do you find clients etc?

Also: Is Muscleman on your payroll, in case of defaults? [J/K]

[Nelson]

This thread is especially interesting to me since I own a position in DirectCash, an ATM operator.

 

I do some hard money lending. Most people pay me back in cash, some do post-dated cheques. A select few will to electronic transfers, but let's face it. If you're borrowing money from a guy rather than a bank, you're not very financially savvy. These people deal in cash. They barely have bank accounts.

 

 

Would be interested to hear more about your business, if you don't mind sharing. Where do you find clients etc?

 

 

Sure. I don't want to hijack this thread too much, so I'll start a new one.