Ask Paul: I have $100k cash hidden in my house


Dear Paul,

I have put aside two lots of $50,000 in cash ($100,000 total) for each of my children to use for either a wedding or house deposit in the coming years.

Currently, the cash is hidden in fireproof satchels in a home safe. I'm concerned about - with the talk about becoming a cashless society - whether I should change this cash for money orders or deposit it into a secret account?

ask paul clitheroe i have $100,000 cash hidden in my house

I don't want the kids to know about this gift until the time is right, which may be another five to 10 years or so. - Suzanne

Goodness, Suzanne, I am very admiring of your efforts to put cash aside for your children and love the use of the fireproof satchels, but unless I am missing something, I don't think we are at huge risk of a war, invasion or the next Great Depression.

But the money does have one near certain, insidious risk: inflation.

If the money sits in the fireproof bags for, say, the next 10 years, and inflation averages, say, 3%, the buying power of $100,000 will be less than $70,000. The next problem is that property tends to appreciate, on average, by around 5% to 6%.

So, if buying a property were an objective, in 10 years the value of property could easily be 50% higher, or more. I do understand why you would like to keep the amount of money you have put aside to yourself. It is a very generous gift.

Let's look at your options.

First, we are moving to using less cash, but I really don't see a cashless society for many decades, so I don't see money orders being a great idea.

Second, by 'secret account' I imagine you mean a secure, high-interest bank account. This appeals to me a lot more. The money would be secure from theft and you would earn around 5%. This would keep the kids' money closer to inflation.

So, my vote is to pop the money into a secure bank term deposit or high-interest account.

Frankly, keeping so much cash at home frightens the daylights out of me due to the risk of a robbery and its value being destroyed by inflation.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Money magazine
January 31, 2024 2.43pm


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James P
January 31, 2024 5.48pm

Anyone know Suzanne's address? Asking for a friend.

Stella Smith
January 31, 2024 8.06pm

what are you hiding it from???

John Smithers
January 31, 2024 8.50pm

Suzanne, you are well intentioned but foolish ...

brett nicoll
January 31, 2024 11.37pm

It seems to me that Suzanne wants to avoid putting the money in the bank as perhaps it'll reduce her pension so why doesn't she consider buying assets that will keep up with inflation like gold? Perhaps she could diversify with other precious metals and collectables.

Bobbie Anderson
February 1, 2024 10.03pm

Can you 5% on a Term Deposit with any of the major Banks?

Robert McElveney
February 2, 2024 9.28am

I really don't understand why Ubank is always overlooked? It is owned by the NAB group. To get a decent interest rate on your money, your required to deposit $200 a month into a Ubank account, which qualifies you for a 5.1 % return on your money. It's like an everyday account, and your money isn't tied up.