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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Is Cash Dead?

Cash is still used widely for tip jars, office pools, cookie sales and other occasional purchases.

| BY Kent McDill

Is cash dead?

Computer hackers continue to attack standard magnetic strip credit cards, and companies around the world are considering an expensive conversion to “chip-and-PIN’’ technology. Bitcoins, the popular new digital currency, receives bad publicity when millions of dollars in the new form of currency get stolen, but backers declare the bitcoin is alive and well.

Despite all these new world troubles, there are continuing reports that the era of cash – foldable or mintable – is about to end. Credit Cards, internet payments and other electronic forms of currency are expected by some to take the place of paper dollars and metal coins.

According to the Federal Reserve, there is more than $1.2 trillion in U.S. currency currently in circulation. That’s a lot of cash and coin. There are approximately 34 billion pieces of paper money in circulation, with an increase of $100 bills raising the amount available. The Fed estimates that almost two-thirds of the currency currently on the market reside outside the U.S., meaning that other markets with advanced electronic transaction capabilities, including Canada and many Western European countries, still believe in the paper dollar.

There are transactions that seem not only best-suited for cash, but nearly impossible to transact any other way: baked sale drives, tip jars, Super Bowl pools, church collections, the Tooth Fairy. The neighbor’s kid shovels your walk, cash is the best option.

But there is an effort afoot to increase the percentage of electronic payments worldwide. The Electronics Transactions Association, a Washington D.C. lobby group for the electronic payments industry, is holding a three-day event in Las Vegas in April to promote electronic payment methods. In fact, the Bill and Melinda Gates Foundation is sponsoring a $50,000 contest for the best transaction startup during the event, known as TRANSACT 14.

For some, currency no longer plays a part in their lives. They make all of their payments through either smartphone apps or internet person-to-person payment services like PayPal.

But cash is going to be hard to eliminate entirely. Convenience and perceived safety, or rather the danger inherent in electronic payment systems, keeps cash as a popular way to complete a transaction.

“Only a wide-eyed optimist would think that cash would disappear any time soon,” said George Peabody, senior director at Glenbrook Partners of California, a payments research firm. “Electronic payments are about displacing cash, and it has been quiet successful.”

Meanwhile, a major bitcoin marketplace collapsed in February, and with it went $500 million. The money in that scam is gone, and no one anticipates a return of investment since Bitcoins are unregulated digital currency.

While some observers believe Bitcoins are the currency of the future, cyber-experts say they are the first exposure to digital currency and a better system will eventually be developed. Either way, Bitcoins have a long way to go before they become standard issue.

One estimate from December 2013 was that there were one million bitcoin owners worldwide, but because the way the system is set up, about half of the Bitcoins are owned by approximately 1,000 people while new investors must get in line to purchase Bitcoins that become available.

Spectrem’s Millionaire Corner surveyed more than 1,000 affluent investors, and 61 percent admitted they were “not at all familiar”’ with the concept of Bitcoins. Another 13 percent said their knowledge was at the “barest minimum’’ making 74 percent of investors who knew little or nothing about the currency.

Seventy-nine percent of those surveyed said they had no intention of investing in Bitcoins, and most said it was because of their unfamiliarity with the product.

Can we survive without cash? Certainly, some believe so. Any science fiction movie that includes a financial transaction of any kind shows futuristic devices that transfer funds from one place to another.

But cash does have one benefit. Unlike electronic money transfers, when you hand someone cash, you know you are giving up something of value and hopefully getting something in value in return.

“There is a tangible nature of cash that supports the awareness of spending,’’ Peabody told Millionaire Corner. “Cash doesn’t just run to the demographics of age. It also runs to the part of the country you are from. Some parts of the country are more conservative and more reluctant to use credit. There are a lot of places where cash is resilient. And sometimes it is more convenient.”

Peabody said we are still years away from the day when electronic payment systems will be considered totally safe.

“It is going to take a while,’’ he said. “The first thing we will see is in five years there will be card chips more than the magnetic strips, and we will have chips and pins. The use of mobile devices to make payments, will also help a great deal.

“But it is going to take a while to bring all the layers that are necessary to a really secure technological life,’’ he said. “There is no one thing that will make us secure.”

That being the case, why are there so many modern thinkers who believe electronic payments are the only way to go and go so far as to declare cash “dead”?

“Because cash does not have an advocacy group,’’ Peabody said.

About the Author

Kent McDill

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.