Yet we love some liquidity. According to money manager BlackRock , affluent investors (those with more than $250,000 in investable assets) keep more than 40 percent of assets in cash. Fresh research makes the case that the emotional payoff may be worth the opportunity cost.
In a paper called "How Your Bank Balance Buys Happiness: The Importance of 'Cash on Hand' to Life Satisfaction," researchers stacked up the bank account balances for nearly 600 Brits against their reported levels of happiness.
Turns out that liquidity makes us feel better.
"Holding investments and not being in debt are both associated with greater financial well-being, but having cash "on hand" is meaningful above and beyond those measures of wealth," wrote co-authors Peter Ruberton and Sonja Lyubomirsky of the University of California, Riverside, and Joe Gladstone at the University of Cambridge.
"While many individuals believe that increasing income or total wealth will improve their happiness, they may also benefit by building a financial buffer in their checking and savings accounts. We found this buffer to be associated with improved well-being regardless of how much a person earns, invests, or owes," wrote the academics.