Warren Buffett Sits On The Sidelines With $189 Billion In Cash: 4 Ways To Put Your Cash To Work If You're Following Suit

Berkshire Hathaway’s latest financial report reveals that the company has increased its cash reserves to a staggering $189 billion. This move, according to Warren Buffett, makes sense given the current macroeconomic climate. During the recent shareholder meeting, Buffett explained that as the world becomes more sophisticated, complicated and intertwined, more can go wrong, and having a substantial cash reserve allows the company to act when necessary.

During the meeting, Buffett revealed that his company sold its entire stake in Paramount Global PARA, resulting in a substantial loss. It also appears that Berkshire Hathaway sold roughly 116 million shares of Apple Inc. AAPL, although Buffett insists he still remains bullish on the company and it will continue to be Berkshire's largest stock holding. 

While holding cash can provide a sense of security during uncertain times, hoarding cash under a mattress will only result in losses as inflation eats away at its value. It’s essential to find ways to put your idle cash to work, generating returns that can help offset the impact of inflation.

If you share Buffett's sentiment about the current macroeconomic climate and want to stay out of the market for a while, here are some options for generating income with your cash in the meantime. 

Certificate of Deposit (CD)

Certificates of Deposit (CDs) are a popular choice for investors looking to earn a guaranteed return on their cash. CDs come with various term lengths, ranging from a few months to several years. Currently, CDs are offering rates of 5% or more, depending on the term. For those with over $100,000 in savings, Jumbo CDs can provide even better rates.

T-Bills

Treasury bills, or T-Bills, are another option for investors seeking to put their cash to work for shorter periods. T-Bills are short-term government securities that mature in one year or less, offering a safe and stable return. One option to simplify investing in T-Bills is the Global X 1-3 Month T-Bill ETF CLIP. With a focus on the short end of the yield curve, CLIP invests in T-Bills with maturities between 1 and 3 months. Boasting a competitive 6.8% yield to maturity and a duration of only 0.1 year, this ETF offers an attractive combination of yield and low interest rate sensitivity.

Basecamp Alpine Notes

EquityMultiple’s Basecamp Alpine Notes from EquityMultiple provide first-time investors with a powerful short-term cash management tool. This special series offers a target APY of 9.00% over a 3-month term, with a minimum investment of just $1,000. EquityMultiple charges no fees on any Alpine Note investment, making it an attractive option for those looking to maximize their returns.

Since its inception, the Alpine Note has been EquityMultiple’s most popular offering, with over 1,500 investors participating in 61 Alpine Note series. EquityMultiple has met all payment and funding obligations with no missed or late interest payments, and more than 79% of investors choose to reinvest with Alpine Notes.

Cityfunds Yield Fund

While the Fed has kept interest rates high, allowing individuals to earn higher yields from CDs, T-Bills, and short-term notes, these yields will decrease when rates eventually come down. To lock in higher yields for a longer term, consider the Cityfunds Yield fund, which offers an 8% target APY and a guaranteed floor of 7%.

The Cityfunds Yield fund provides investors with stable cash flow backed by real estate assets. By investing in a diversified pool of collateralized real estate loans, including home equity-backed notes and short-term mortgage notes, the fund aims to generate consistent interest income for its investors. With quarterly distributions and a five-year term, the Cityfunds Yield fund can be an excellent option for those looking to enhance their income stream and diversify their portfolio with real estate-backed investments.

The Bottom Line

As Warren Buffett’ and’s Berkshire Hathaway sits on a record $189 billion in cash reserves, individual investors who share the same cautious sentiment have several options to generate income while waiting for the right opportunity to invest in stocks. CDs, T-Bills, Basecamp Alpine Notes and the Cityfunds Yield fund all offer attractive yields and varying levels of liquidity, allowing investors to put their idle cash to work in a way that best suits their needs and risk tolerance.

Read Next:

• Florida is home to some of the most rapidly growing real estate markets in the country, and this new platform will let you get a piece of the action with as little as $100.
• Whole Foods' landlord has delivered a 15% net IRR for its investors since 2015. Check out the latest investment opportunities added to its platform.