Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
Former Berkshire Hathaway CEO Warren Buffett has never shied away from calling out underperforming investments. Among his most scathing critiques? An asset virtually everyone owns — cash.
In a 2008 op-ed for the New York Times, Buffett warned, “Today, people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value (1).”
Buffett had a point. Interest rates were low in 2008, so cash didn’t pay much back then, and in fact, it rarely does.
Inflation will always steadily erode the purchasing power of money, diminishing cash’s real value over time — which is why most billionaires keep their wealth highly illiquid. The standard rule for this cohort is no more than 5% of wealth in cash.
For example, Jimmy Donaldson, more famously known as MrBeast, claims he “doesn’t even have enough money in his bank account to buy McDonald’s in the morning” — in spite of his reported net worth of $2.6 billion (2).
Fast forward to today, and Buffett’s story seems to have taken an unexpected turn. By November 2025, Berkshire’s cash reserves had reportedly swelled to a staggering $381.7 billion (3). This is in spite of the falling value of the U.S. dollar, which lost 8% of its purchasing power in 2025 (4), and annual inflation rates of 2.7% between December 2024 and December 2025 (5).
So, what’s going on?
Here’s why companies like Berkshire are hoarding cash — and three tips to make your money work harder to boost your net worth.
The sheer size of Berkshire’s cash pile has raised eyebrows and fueled speculation about the company’s overall strategy.
Edward Jones analyst Jim Shanahan told Reuters that the growing cash reserve “begs questions about whether Buffett thinks stocks are overvalued or an economic downturn is coming, or is trying to build cash for a big acquisition (6).”
In the same report by Reuters, CFRA Research analyst Cathy Seifert interpreted Berkshire’s cash hoarding as signaling a “risk-off” mindset, which could lead investors to worry about its implications for the economy and markets.
However, Buffett himself has already addressed concerns about his cash strategy, explaining his cautious approach during Berkshire’s annual shareholders meeting in 2024.
“I don’t think anybody sitting at this table has any idea of how to use it effectively, and therefore we don’t use it,” he stated, emphasizing that “we only swing at pitches we like (7).”
Buffett also voiced concerns about future complexities, noting, “As the world gets more sophisticated, complicated and intertwined, more can go wrong.” He added that the company aims to be prepared to “act when that happens.”
In this light, the decision to hoard capital arguably makes sense for a company with the storied success — and cash reserves — of Berkshire Hathaway. But it makes less sense for the average investor who is just trying to build up their net worth or ready themselves for retirement.
With inflation chipping away at the purchasing power of every dollar, putting your money to work not only helps you grow your wealth but also shields it from inflation’s long-term erosive effects.
But what are some ways to get your hard-earned cash to work for you?
As one of the most successful investors of all time, Buffett built his fortune on investing in equities — particularly U.S. stocks. In his 2016 letter to shareholders, for example, he expressed unwavering confidence in the United States: “American business — and consequently a basket of stocks — is virtually certain to be worth far more in the years ahead (8).”
And Berkshire’s performance serves as a powerful testament to that principle. From 1964 to 2023, the company delivered an astonishing overall gain of 4,384,748% (9). That gain, it is worth emphasizing, is not measured in dollars, but as a percent.
When advising how to replicate this kind of success, Buffett emphasizes investing in businesses with durable competitive advantages — companies with unique strengths that allow them to outperform rivals over the long term. He also stresses the importance of understanding your investments to reduce risk.
“Risk comes from not knowing what you’re doing,” he famously said (10).
In short, doing your homework and focusing on industries and companies you understand is crucial for stock market success.
Today, there are more resources than ever to help investors make informed decisions. For instance, platforms like Moby, founded by former hedge fund analysts, offer stock research and insights tailored for everyday investors.
Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.
In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average — and they even offer a 30-day money-back guarantee.
Real estate has also long been considered a reliable hedge against inflation, mostly thanks to its intrinsic value and income-generating potential.
When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up over time, providing landlords with a revenue stream that adjusts for inflation. This combination makes real estate an attractive option for preserving and growing wealth during periods of escalating prices.
In 2022, Buffett himself stated that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a check (11).”
Basically, whether the economy is booming or in a recession, people need a place to live. And with real estate prices rising to unaffordable levels in many parts of the country, renting has become the only option for many people.
These days, you don’t need to purchase a property outright to invest in real estate.
Crowdfunding platforms like Arrived have made it easier for average Americans to invest in rental properties without the need for a hefty down payment or the burden of property management.
Backed by world-class investors, including Jeff Bezos, Arrived lets you invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.
To get started, all you have to do is browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, it’s as easy as selecting the number of shares you’d like to purchase.
Once you’re an investor with Arrived, you’ll also gain access to their newly launched secondary market, where investors can buy and sell shares of individual rental and vacation rental properties directly on the platform.
This allows you to buy into properties you may have missed at the initial offering or sell shares before a property reaches the end of its hold period.
The reason is straightforward: The yellow metal can’t be printed in unlimited quantities by central banks like fiat money can. And since its value isn’t tied to any one currency or economy, gold could provide protection during periods of economic uncertainty.
This unique characteristic has earned it the reputation of being a “safe haven” asset. Moreover, while inflation erodes the purchasing power of fiat currencies, gold’s appeal as a stable store of value often grows, driving up demand.
And with recent global tensions, investors have been taking note of its resilience. In January 2026, gold surpassed the $5,000 per ounce mark for the first time (12). This surge in prices has led some, like economist Peter Schiff, to predict 2026 to be the year “when it gets real” for gold (13).
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
Ultimately, if you’re not quite sure which direction to take, you could also talk to a financial advisor to figure out which investments or investing style suits you and your money best.
But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.
That’s where Advisor.com can come in. Advisor.com is the online platform that connects you with an expert in your area for free.
How it works is simple: Just enter a bit of information about yourself, like your ZIP code and your financial goals. Then, the platform will comb through its database and match you with someone who can help you figure out which investments are right for you.
New York Times (1), (12); Fortune (2); Bloomberg Television (3); TD Economics (4); U.S. Bureau of Labor Statistics (5); Reuters (6); Steady Compounding (7); Berkshire Hathaway (8); Globe & Mail (9); CNBC (10), (11); @PeterSchiff (13)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
