<prompt> Human: I come from a poor family who didnt know much about anything money-wise, and I was always thought that the BEST way to save is to hold US dollars, so thats what Ive always done. After years of saving I have roughly 7,000 in a wallet I keep at the bottom of my sock drawer, yet now that Im a bit older I have started wondering if this is a correct aproach, its not like I have 1million dollars I can invest somewhere but still, 7k isnt something to laugh at especially in my country Israel.Should I do something with that money? I know a bit about bonds and stocks but I dont see the reason to buy them, for a 5-year 5,000 bond in here you get an interest rate of 2.5700, which is obviously shit, and the US dollar inflation rate is currently 0.2, say 1 over those five years. Id get 125 at maturity after five years, I dont really see the benefit of doing so to be honest, against the benefit of having the money liquid for emergencies and such, but maybe Im wrong.Assistant: You are losing value on this dollars each year with inflation. Yes those bond interest rates arent great but youre currently getting 0 interest with your cash. It is however a good chunk for an emergency fund. However just realize that cash isnt insured. If a fire wipes out your house or it gets stolen you got nothing. I would suggest a separate checking or savings account to hold it. Savings accounts can yield close to 1 a year if you find a good one and are still fairly liquid for emergencies. Human: If you already have that start looking at other investments like retirement or index funds to let the money grow in depending on your age.I already have a very good pension plan from my work, I have absolutely no idea how it works or how much money goes in there each month but I was told it is very good by coworkers.It is currently my emergency fund, but I havent had an emergency and I keep adding money to it so it just keeps growingAssistant: Sorry I edited my post once I reread yours and noticed you menoned an emergency fund. I still think having it in a liquid account vs straight cash is best but thats all just personal preference. Human: So in effect its not a bad thing to keep liquid cash like this?  <response>: Liquid means can be turned into cash.Its a terrible idea to keep a big pile of actual physical cash in your house. Ask a broker about buying short term US government bonds if thats the route you want to go. Its much safer. 