The desire to save money has been more popular than ever amongst Americans lately. What with the coronavirus pandemic, lockdowns, and unemployment skyrocketing in 2020, last year caused a panic that led citizens to (smartly) save their hard-earned cash as much as possible.
Although we didn’t necessarily need anyone to tell us that “saving money is good”, it does bring us back to a piece of advice once given by Warren Buffet back in 2010: “We pay a steep price to maintain our premier financial strength. The $20 billion-plus of cash equivalent assets that we customarily hold is earning a pittance at present. But we sleep well.”
Obviously, we’re not looking to save $20 billion such as Buffet and his partners back then, but this advice resounds just as well for whatever our bank account looks like. Whatever amount of money we feel will provide us with a good safety cushion, relevant to our situation, the message is still as relevant as it ever was.
This is especially important when you consider that things are starting to open up. Perhaps you’re finally ready to go traveling after a year of staying at home. But perhaps you should be wary about not “overcorrecting”, and retain some caution even though the economy is starting to return to its usual form.
As finance expert James Guarino explained, “For Warren Buffett and his business, his sleep at night amount appears to have been $20 billion back in 2008. I suspect all of us have a similar need to compute an amount, albeit, the amount has a whole lot less zeroes next to our number.”
