Cash: The False Prophet

When I was growing up in a loving but economically stretched household, birthdays and Christmas presents were nice. But what really rang my bell was a gift of cash. These sometimes materialised when an aunt or uncle couldn’t think of anything better. As a kid those crisp notes were full of potential, self-directed treats, a true treasure.

My parents were exclusively a cash using family; if there was ever any excess it ended up in a bank savings account or credit union. I followed this path during my first seasonal job as a young teenager, potato picking and hay and straw baling when required on a local farm. Taking my savings book to the teller and getting the interest marked up was a nice experience, but it didn’t take long for me to wonder if it was possible to earn more than the pittance added to my balance.

That pittance of interest felt good until I thought deeper. Inflation was running near 12% at the time and I was earning 10% on my savings book. Even at that age I figured out I was losing money. Every time I held those crisp notes, I was no longer seeing “potential” or “treasure”; I was seeing reduced value. The prophet hadn’t just stopped giving; it was now actively taking. This made me look for a different solution.

Luck stepped in with the solution to my dilemma. Around that time, the UK government began aggressively selling off public utilities, with British Telecom being one of the largest. The popular campaign, urging ordinary citizens to buy shares, made this feel different from the quiet credit union.

With the money earned, I took the plunge and bought shares in the BT IPO. Suddenly, my cash wasn’t passively decaying; it was transformed into capital that grew with a major national asset. This single transaction was my first, tangible lesson: true wealth is found in ownership, not in mere possession.

That initial purchase of a public utility stock caused a shift in my opinion of cash. The magic of those crisp notes I once treasured as a child was an illusion of wealth, a promise of potential that inflation silently broke. Cash, the False Prophet, promises safety but guarantees slow decline. The real treasure is not in the dollar or pound bill itself, but in the principle of production. I began to understand that true wealth is achieved not by saving, but by taking a calculated risk and becoming an owner of shares in wealth-producing businesses.

I still hold that first stock purchase from 1984. It’s now part of a diversified tracker portfolio, and I’ve done a few calculations—okay, I admit, I got Google Gemini to do the calculations. The £1,000 cash I used for the IPO would buy me approximately £400 worth of goods today if it had been left in a savings account. My utility stock has been a pretty uninspiring investment, but even so, it’s worth £17,000 of current purchasing power. That’s wealth beyond my younger self’s dreams, simply delivered by abandoning cash in favour of the market.

Yet I’ve come full circle with my cash journey. Today, I hold a portion of my portfolio in cash as a risk mitigation tool, possibly the only legitimate use for cash in an investment strategy. The False Prophet of cash is unmasked not for being worthless, but for pretending to be something it’s not: a long-term store of value. It has its place, just not on the childhood pedestal where I once kept it.