Here's One Time It Doesn't Pay to Manage Your Money Like Buffett. From Photo Credit: Nattanan Kanchanaprat

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By Tim Stobierski

As the world’s third richest person, Warren Buffett has clearly made a lot of right moves. So when the Oracle of Omaha does something with his money, it’s wise to follow suit.

Well, usually. Buffett’s company, Berkshire Hathaway, is currently sitting on a cool $109 billion as he considers his next big business move. While that may sound like a great thing, hoarding too much cash (outside of an emergency fund) can actually work against you. Not only is money in your savings account not growing as much as it could, but thanks to inflation, its value could actually be decreasing.

Buffett acknowledged as much in his shareholder letter in February, writing: “Our smiles will broaden when we have redeployed Berkshire’s excess funds into more productive assets.”

Of course, most of us don’t have billions on hand. But you can make sure the cash you do have is working effectively for you. Here’s how.

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