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This question: How Can I Make Consistent Large Cash Withdrawals From U.S. Banks? recently appeared on the HNQ list. The question concerns the logistics of withdrawing large amounts of cash from their bank on a frequent basis.

Some of the comments questioned the practicality and legitimacy of this practice. So this question is to address that exact concern:

What are valid reasons to carry and use large amounts of cash in the modern world? Focused on legal reasons, since the inherent implication of such precautions when withdrawing large amounts of cash is due to illegal uses, but you’re welcome to list all uses.

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  • Comments cleaned up. Further ones are likely to be handled aggressively. Commented Oct 30, 2022 at 20:10
  • I am new to this community and what I see happening here is discouraging. I'd like to thank those commenters and answerers who have managed to maintain a business-like tone.
    – 311411
    Commented Oct 30, 2022 at 23:15
  • @311411 unfortunately it's impossible with people blinded by ideology and feeling the need to proliferate it uncontrollably. Sometimes these baits come along and don't get closed, unfortunately.
    – littleadv
    Commented Oct 31, 2022 at 1:56

6 Answers 6

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Yes, it's increasingly rare for people to use significant amounts of cash and some people try to use cash to avoid taxes. There are, however, plenty of people who use cash in large quantities without breaking laws.

I know farmers and ranchers who take many thousands of dollars in cash to equipment/livestock auctions/sales. There is proper documentation for the transactions, they bring cash because it's reliable (card reader offline/failed, card declined due to fraud detection/other) and sometimes cheaper (cash discount/fee for paying with a card).

I know people who buy and restore cars/RVs/furniture/machinery who typically buy with cash because the sellers are individuals who aren't set up to accept credit cards and wouldn't trust a check.

There are contractors/tradesmen I've worked with who prefer cash not to dodge taxes but to avoid paying the overhead associated with accepting card payments and risks of accepting checks. Anyone who hires such people with regularity (landlords/house flippers/contractors) might have reason to regularly withdraw and spend large amounts of cash.

I prepared taxes for a professional gambler who would withdraw a large pile of cash every Thursday from a dedicated bank account and deposit every Monday. His larger winnings would be reported to the IRS so he kept detailed records of losses and minor winnings, and always paid for food/drinks/lodging/travel from a separate account.

There are also people with lots of money that like to spend it, a subset of those people prefer to use cash for day to day things, and day to day things to them might seem like large quantities of cash to you.

There's nothing inherently dishonest about someone who doesn't trust banks or hates credit card companies and refuses to use them or just loves cash. It might not be a practical/convenient/safe approach sometimes, but some people are willing to make tradeoffs like that and are free to do so.

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  • The last two paragraphs don't really fit with the rest of this answer. The earlier paragraphs, which are very good, give plausible reasons why someone might use a lot of cash for legitimate purposes. The last two paragraphs just boil down to, "It might be a personal quirk." In the context of the question that inspired this one, that's not too helpful. If you're acting suspiciously, citing reasonable explanations for your behavior will allay the suspicious person's concerns. Insisting that it's just a personal quirk will likely make them more suspicious.
    – Nobody
    Commented Oct 31, 2022 at 13:12
  • @Nobody My point is that there's nothing inherently illegitimate about using cash even in large amounts, calling a cash preference a personal quirk doesn't make it less legitimate. The point about the very wealthy is that it's far more reasonable that someone worth many millions or billions might have larger piles of cash on hand than people of lesser means. I use cash for tipping and at restaurants, some very wealthy people might only use cash for the same things but that could be many thousands per week for them.
    – Hart CO
    Commented Oct 31, 2022 at 14:34
  • I think you're missing my point. People judge us by our actions. If we act in a way that makes us look suspect, such as by using large amounts of cash when most people would use common money transfer services, then people will be suspicious of us. If we provide a reasonable explanation, then they will be less suspicious, but if we provide a non-explanation like "I just hate banks", then they will assume that we are covering up something unsavory, reinforcing their suspicions. It may even be rational for them to make these assumptions, depending on the prevalence of illicit cash use.
    – Nobody
    Commented Oct 31, 2022 at 15:03
  • The subtext of this question is, "What kinds of things might make people less suspicious of my cash use habits?" Saying that there is nothing illegitimate about having a personal quirk about cash use isn't helpful in this context because that's simply not going to allay people's suspicions about a person's behavior. In this situation one really only have three options: provide an explanation that will satisfy people, change one's behavior, or accept that people will be suspicious. Making an informed choice starts with acknowledging that this is the way the world is.
    – Nobody
    Commented Oct 31, 2022 at 15:09
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    @Nobody "What are examples of honest reasons for carrying and using large quantities of money?" You are poking at something a bit different, that's fine. Mostly this is subjective. You find "I hate banks" a suspicious explanation for having cash, many others don't. Luckily, there is seldom any need to defend cash usage to someone.
    – Hart CO
    Commented Oct 31, 2022 at 15:34
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First valid reason is property rights. It's your money, so you have right to carry it in any place, in any form, however you wish.

Money can be used to buy stuff. It can be used to buy vegetables, fruits, meats, coffee, gold bars, guns, automobiles, houses, or crack cocaine. That's the #1 reason to carry cash. You go with the cash into vendor's shop, or even lemonade stand on the street and you can buy anything you wish, because it's your money.

Money can be used to buy services. You can use it to get a haircut, to fix the roof, to buy a training, or to buy sexual services. While some governments will object to your god-given right to pay services in cash, or make businesses register you as a cash holder, buying services is still a legitimate use of cash.

Also you may want to carry money around to show off. Just like peacocks carry their heavy ornamental tails, you may want to carry a roll of dollars around your neck. And even though it may make people jealous, inadequate, or even violent and possessive about your wealth, it's still your right to show off your wealth. Even if only to mark your skills and superiority, you have rights to parade with cash, and to say it otherwise in case of theft or civil forfeiture would be victim-blaming.

Finally, cash is resistant to electricity outages and network failures. Your ATM may not work if there's no radio link to the bank, and your shopowner may struggle to accept your debit card if there's no electricity. With cash payments, everything works, money can be calculated on paper without electricity. So this is your additional right, you can do legitimate business even when big systems do fail, because you use a paper rather than bits.

Another good reason for using cash are bank fees, and negative interest rates. If it's costly to keep money in the bank, you can as well live without a bank. Preferably also hold multiple hard currencies, in case your country's economy goes to hell.

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    "money can be used to pay for things" is meaningless. In your other question you suggested that you keep tens of thousands of dollars in cash. How many vegetables do you eat? And just fyi - haven't paid a bank fee in more than a decade.
    – littleadv
    Commented Oct 29, 2022 at 15:47
  • What do you call "hard assets"? You haven't mentioned that in your answer, you have mention good.
    – littleadv
    Commented Oct 29, 2022 at 22:41
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    You bought real estate with cash ? Where? How?
    – littleadv
    Commented Oct 29, 2022 at 22:49
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    I've done some comment cleanup on this post and further comments will be pruned aggressively. Commented Oct 31, 2022 at 7:06
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What are valid reasons to carry and use large amounts of cash in the modern world? Focused on legal reasons, since the inherent implication of such precautions when withdrawing large amounts of cash is due to illegal uses, but you’re welcome to list all uses.

To clarify: There's no law prohibiting you from carrying and using large amounts of cash in the US. Any use of cash is legitimate as long as you're not breaking the law in any other way.

However, as I mentioned in the other answer, using large amounts of cash routinely is extremely uncommon and unusual. There are significant barriers to using cash in large amounts in transactions (including the BSA mandated reports, increasing likelihood of IRS audits, potential scrutiny from all kinds of law enforcement, etc).

While you may end up not being charged with any crime, your money may be taken away from you in civil forfeiture, in many cases leaving the (expensive) burden of proof that the money is legitimately yours on you.

You may also struggle to use it. In many cases large bills are not accepted, and/or cash is not accepted for large amount transactions.

It is also inconvenient to carry large amounts of cash around, and is also risky - criminals may learn about you and will try to rob you.

So while there's no law prohibiting this, realistically very very few people operate in cash only in the modern world in their day to day live without trying to conceal breaking one law or another.

So if you're asking for reasons to routinely use large amounts of cash then - it is most likely that people operating in cash are at least committing tax evasion (which is why the IRS is the major law enforcement agency usually involved in investigating). However, as with Al Capone, while the IRS may be the one to secure conviction, the underlying crimes may be much more severe than mere not paying taxes.

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    I feel like only the last paragraph really answers this question, and the rest is a rehash of your answer on the linked question, and the reasons not to do such a thing, rather than this question which asks why you would. Are you suggesting that (on the whole) the only reason to consistently use large amounts of cash is to commit tax evasion? That’s the only example you gave.
    – Eric
    Commented Oct 28, 2022 at 18:55
  • @Eric money laundering (which translates to the crime of tax evasion), usually from other crimes. Yes.
    – littleadv
    Commented Oct 28, 2022 at 19:00
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    @littleadv the question was about legitimate examples of cash use, not about why it's dangerous or troublesome for businesses. Commented Oct 29, 2022 at 9:13
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    The question asks for reasons to carry large amounts of cash. You've listed reasons not to carry large amounts of cash, which doesn't really answer the question. Commented Oct 29, 2022 at 12:26
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    @verybigcat I started with that. Any use of cash is legitimate as long as it is not while committing a crime. It doesn't make it reasonable or acceptable.
    – littleadv
    Commented Oct 29, 2022 at 15:41
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We did this once 27 years ago. We we went on a house hunting trip and instead of renting a car for three weeks we decided to just buy one since we wanted to do this after the move anyway.

At the time travelers checks was by far the cheapest way to bring dollars into the country: we had no US bank account and the transfer fees and/or exchange rates for other mechanisms were horrible. We did declare it at customs and got a good grilling. The car dealer had to report the cash transaction to the IRS.

In hind sight it was a stupid thing to do, but we got lucky. Being a family with three small children probably helped with customs and civil forfeiture wasn't as bad as it is today.

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Answering as the OP of the question you linked: simply to have direct access to my money without a middle man that can make accessing it more difficult/timely. I know that I am always a car/plane ride away from accessing the entirety of my liquid net worth, whereas with banks I am potentially two weeks away from accessing my money.

With the exception of my house (which I bought with a check) and certain online things like plane tickets (which I buy with a debit card) as an individual I exclusively use physical cash. In my past life I was a rate trader, so intimately understand that mathematically consumer credit is a great tool for many, time value of money, etc. etc. But my utility curve is different than most-- even if offered a 0.01% 30yr mortgage, I would rather pay outright at inception. Put simply, I don't want a middle man with access to my funds, and I don't value the services that banks provide as being worth more than the melt value of a penny, so I don't want to help them build profit without being appropriately compensated at at least the long-run domestic equity premium.

As for why I exclusively use physical cash: mostly ethical concerns.

For the same reason that some people like E.S.G. investing despite knowing that as an individual they will do nothing to prevent what they see as wrongs from being funded, I know that as an individual I will have absolutely no impact on what I see as flaws in the consumer banking sector. With that caveat out of the way...

  1. I don't like the idea of others using my money to make loans.
  2. With the reserve requirement at 0.00%, I feel a sort of moral duty to do my small part and keep banks semi-honest with cash on hand as I see excess money creation (and correspondingly inflation) as the root of a lot of evil in the world.
  3. I view a cashless world where one has to ask bankers permission to use their own money and where every purchase is tracked as a dystopia. To those who say "You wouldn't care if you have nothing to hide"... I submit to you that you have not thought out your position on privacy all the way. Everything in the world can be justified with "just doing it for your own good" (think doctors and photos and children).
  4. I have a particular disdain for corporate-speak and those who hide behind empty platitudes. Each dollar I have reads "this note is legal tender for all debts, public and private". Clearly, this is a lie ("sorry, we can't accept any bills larger than $20"). A similar argument can be made for the text of the 4th Amendment. It disgusts me that the people elected to serve me lie to my face in this manner, and I don't want to go along pretending these lies are not in fact lies.

As for the risks inherent with doing so: I know, and I accept them. I am lucky in that I will be okay no matter if I lose every dollar tomorrow.

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    That is a tautology. "What would be the honest reason to keep my money in my pocket? -- wanting to keep my money in my pocket". You can have direct access to your money at all times without it being stored in cash in your mattress, in fact - in many cases, as I've explained, having it in cash stored in your mattress makes it less accessible because to use it you'd need to convert it into something else.
    – littleadv
    Commented Oct 30, 2022 at 18:38
  • That isn't my answer, nor is your incorrect interpretation logical. It can easily be turned around. "What would be the honest reason to let someone else have access to my money?--because I want to let someone else have access to my money". My answer makes clear my reasons, among them that I do not want other people to have access to my money, that I don't want any debt, and that I don't want to finance lending activities. It should be apparent to everyone that you do not have access to your money if you have to ask permission from someone else to use said money (cards decline all the time)
    – EDS
    Commented Oct 30, 2022 at 20:16
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    if your debit card is declined due to lack of funds when you do in fact have funds - then you can sue the bank. If it is declined because you can't type your PIN right - that's your problem. My experience with debit card declines is that my debit cards never decline. Credit cards on the other hand.... But credit - is not your money.
    – littleadv
    Commented Oct 30, 2022 at 20:50
  • @littleadv having to sue a bank to get access to your funds proves that you do not in fact have direct access to your money at all times
    – EDS
    Commented Oct 30, 2022 at 20:57
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    You don't have to sue the banks. If the banks breached their contract with you - you sue for damages. You sue when someone wrongs you, when someone does what they were not supposed to. Like when a cop takes your cash away from you at a traffic stop.
    – littleadv
    Commented Oct 30, 2022 at 20:59
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I was traveling out of town long time ago and my credit card( that gave me maximum cash back and had reasonable high limit) was declined. I had to switch to use credit card that had lower cash back and lower limit, but was able to manage my trip. I was afraid at that time if my other card was also declined, what will I do. So I guess carrying some amount (may be $200 ) be reasonable to keep as cash.

I remember when I read the book The Intelligent Investor, it mentions that one should keep $500 or $1000 as cash though I cannot recall exact page. When I am reading other answers and other related questions, there is a reference to civil forfeiture and I am surprised that if $200 or so is discovered with me, and I am not drunk or intoxicated in any way, should not the burden of proof fall on police that where I got that $200, if they want to seize that money assuming what ever wrong assumption they want to have.

I think question what is reasonable amount of cash a person should hold.

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    The op asks about large amounts. While 200 or even 1000 may seem large to some, the context is in the linked question where we discussed stockpiling tens of thousands of dollars per month
    – littleadv
    Commented Oct 29, 2022 at 15:39

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