Hold onto cash for emergencies and opportunities
Warren says: “Establish a large cash reserve when you retire so you can withstand the inevitable financial challenges you will face. Don’t be afraid to tap into this fund to take advantage of lucrative investment opportunities.”
While Warren Buffett clearly advocates heavily investing in chosen stocks, he does not believe in investing all of one’s earnings in the market. Instead, he recommends taking the more responsible and practical approach by leaving a portion of liquid assets available for emergencies and future opportunities. Like most financial experts, Warren believes everyone should have a reserve of cash for unexpected expenses. Maybe you already have a nest egg set aside for just that purpose. If you don’t, consider that a top priority.
However, where Warren’s approach differs from others is in his subtle encouragement to use this reserve for new prospects that may arise, specifically when one has already retired. The investing magnate advises retirees to hold onto their ability to take action and invest at will by keeping some cash available for such opportunities.
Who knows? By keeping a stash of cash on hand during your retirement, you may just live out your golden years a lot more comfortably than you’d anticipated.