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Bennie Waller [email protected] 434-395-2046 Longwood University 201 High Street Farmville, VA 23901. Managing cash (near cash) assets involves liquidity choices. Liquidity is the ability of assets to be easily converted to cash

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Bennie Waller [email protected] 434-395-2046 Longwood University 201 High Street Farmville, VA 23901

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Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

Bennie Waller

[email protected]

434-395-2046

Longwood University201 High StreetFarmville, VA 23901


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Managing cash (near cash) assets involves liquidity choices.

  • Liquidity is the ability of assets to be easily converted to cash

  • For example, holding cash as an asset provides a larger degree of liquidity, however little to no return. Conversely holding long-term assets such as stocks or real estate provide larger expected returns but significantly less liquidity.

  • Pay yourself first (automatic savings).

  • The earlier you start, the faster you will accumulate wealth.


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Savings Accounts – are very liquid, safe and earn some interest. However, most require minimum holding periods to earn interest, have minimum balances and pay a very low rate.

  • CDs – very liquid and safe, however have penalties for early withdrawal and have minimum deposit amounts.

  • Treasury bills (3-12 months) – very safe, exempt from taxes however with low rate of return.

  • Savings Bonds – safe, tax-free with no fees; low liquidity long maturities with semi-annual compounding.

  • NOW accounts – pays interest but requires a minimum.

  • MMDA – provides variables rate that fluctuates with market, safe but does requires minimum


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • “Banks” or depository financial institutions provide traditional checking and savings accounts and offer a wide variety of financial services.

  • Credit unions – established by organizations and open only to members of that organization. Services are similar to commercial banks but often offer more competitive rates.


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

Non-deposit-type financial institutions have more recently begun to offer similar services as banks, while banks have begun to offer services traditionally provided by non-deposit institutions (e.g., securities purchases).

Thus, over the past two decades, traditional lines between the two types of financial institutions have blurred considerably.

  • Mutual funds –

  • Stock brokerage firm –

  • Insurance companies –


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Consider these issues;

    • Cost – fees, rates, minimum balances

    • Convenience – locations, ATMs

    • Consideration – importance of personal attention

    • Safety - FDIC

  • Balancing your checking account:

    • Keep track of every transaction

    • Compare monthly statement with register, then reconcile register balance with bank balance.


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Access to your accounts to:

    • check balances, transfer funds, and pay bills.

    • view your financial information 24/7

    • Via the internet, a mobile phone, or other electronic device.

  • Allows you to choose an internet-only bank.

  • Allows for more efficient record keeping (Mint/Quicken)


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Allow you access the money in your accounts electronically and limits the need to carry cash.

  • Looks like a credit card but acts like a checking account. That is you must have the money in your account to make transactions.

  • Check card blocking policies.

  • Financial reform

    • Overdraft fees (must opt-in)

    • Over the limit transactions


Bennie waller wallerbd longwood edu 434 395 2046 longwood university 201 high street farmville va 23901

  • Banks are run by humans and computers. Both are capable of error. Always keep a record!

  • Avoid human errors such as those involved with deposits at ATMs.

  • Report immediately. Call or write the bank.

  • By law, write within 60 days of receiving your statement.


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