How Much Cash Does Warren Buffett Have in His Portfolio?

Warren Buffett

Warren Buffett is known as arguably the greatest investor of all time due to his impressive compounding annual returns as CEO of Berkshire Hathaway.

It’s always interesting to monitor Buffett’s behavior and see exactly what he is doing with his money.

How Much Cash Does Warren Buffett Have in His Portfolio?

As of Q2 2022, Warren Buffett holds ~$105 billion in cash on hand to give Berkshire Hathaway a massive financial cushion in case of hard times. Buffett believes in keeping around 20% of his company’s equity in cash to protect shareholders from huge risk.

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Buffett compares cash to oxygen and considers it vital to the success of any business. Here’s a clip of Warren Buffett talking about the importance of cash during Berkshire Hathaway’s Annual Shareholder Meeting:

YouTube video

How Does Warren Buffett Invest Berkshire Hathaway’s Cash Position?

Buffett invests most of the company’s cash into U.S. treasury bonds that pay a high yield. U.S. treasuries are considered safe and liquid investments that are exempt from state and local taxes.

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This allows Berkshire to earn approximately ~$2.5 billion in cash annually from the treasury yield alone.

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Keeping a Cash Position Gives You Lots of Financial Leverage

While inflation continues to erode our purchasing power, Buffett shows the importance of keeping enough cash on hand to weather any storm.

You may consider allocating 20% of your overall portfolio into cash to reduce market volatility and give you options to pounce on great deals in the market.

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Conclusion

Holding cash in your portfolio is extremely important for long-term success. Warren Buffett keeps a ton of cash on hand to protect his shareholders and take advantage of stock market deals when they present themselves.

If you’re looking to increase your cash position then start with a 20% cash position and go from there.

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