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3 Reasons of Holding Money

3 Reasons of Holding Money

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Published by aounzaidi

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Published by: aounzaidi on Jan 25, 2010
Copyright:Attribution Non-commercial


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Usually there are three defined motives of holding money:
Transactions Motives
- this is the most obviousreason for holding money. We need money to be able tospend it, and so hold balances of money appropriate for that.Like the amount of money that you have in your pocket,wallet or purse.
Precautionary Motives
- we also hold money in casewe need to spend it. Unexpected bills or contingencies maymean that we need to hold a little extra money in case. Likethe money we hold in banking accounts.
Speculative Motives
- People have to decide howthey are going to hold their money. There are of course anumber of different ways, which can briefly split it intointerest bearing assets or non-interest bearing assets. Theinterest rate and the ease of access may be two importantfactors in determining this decision. The speculative demandfor money is the amount held for the potential purchase of assets.

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Ali Kharraz added this note
Assalam Alaikum Mr Director of Capital Holding I got Your Contact I m verry happy to hear from you ,and nice to meet You I need 100.000 us$ to invest it in The Project of Cows Making Milk. in 40 Km from Agadir Morocco. The Village Called Inshaden, There Forests, cars Exported Milk to Cobag Company for Milk, Professional People in Agriculture. Pls do Not tell me fees, I m Simple Man Best Wishes
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