Warren Buffett once said this US investment was ‘terrible long-term.’ Now he has $381 billion of it. Should you be holding it too?

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.

Why hold cash?

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?

Tip #1: Stocks

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.

Get top stock picks from Wall Street veterans

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.

Even better, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Tip #2: Real estate

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.

Become a real estate mogul — for as little as $100

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.

From here, you can start receiving any quarterly rental income and, in the medium to long term, profit from any property appreciation.

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.

With access to more than 400 properties in 60 cities, this new way to trade real estate opens up flexibility and opportunities to gain access to more properties every quarter.

Tip #3: Gold

Gold is another popular hedge against inflation.