Cash Is King

Cash Is King refers to the idea that cash (liquid Money) is the most valuable Asset a business or individual can hold, particularly during times of financial uncertainty. It emphasizes the importance of Liquidity over other forms of wealth, such as investments or physical Assets, as cash provides the ability to make immediate purchases, settle debts, and take advantage of opportunities.

For example, during an economic downturn, companies with significant cash reserves can sustain operations, pay employees, and navigate challenges better than those reliant on Credit or investments that may have lost value.

In 2008, during the financial crisis, businesses like Apple thrived because of their substantial cash holdings, allowing them to invest in new projects while competitors struggled with debt.

Conversely, a company like Lehman Brothers collapsed partly because it had leveraged its Assets heavily and lacked sufficient cash Liquidity to cover its obligations when Credit markets froze.