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Introduction

Warren Buffett, one of the most respected investors in history, has long emphasized the importance of holding cash—especially during economic downturns. His philosophy: “Be fearful when others are greedy, and be greedy when others are fearful,” applies perfectly to the concept of maintaining liquidity.

This article explores why Buffett—and many financial experts—advocate for strong cash positions in times of crisis, and what modern individuals can learn from this timeless wisdom.

1. Cash Means Optionality

Buffett views cash not just as idle money, but as **optionality**—the ability to act when opportunity arises. In a crisis, cash enables you to:
– Invest in undervalued assets
– Cover emergencies without debt
– Make strategic moves while others are retreating

In uncertain markets, liquidity becomes your most flexible weapon.

2. Why Liquidity Beats Leverage During Crisis

During economic booms, leverage (borrowing) looks smart. But in a downturn, debts become liabilities and access to new capital shrinks.

Buffett famously avoids excessive debt in his companies, ensuring they have enough cash to withstand shocks without being at the mercy of creditors.

3. Modern Application: How Individuals Should Prepare

Today, individuals can apply this philosophy by:
– Maintaining a 3–6 month emergency fund
– Avoiding over-reliance on credit cards or payday loans
– Using fintech tools (like 카드깡) to access credit liquidity when needed—but only responsibly
– Prioritizing stable income over speculative gains

Platforms like DreamGift offer structured, legal ways to ensure liquidity without overexposing yourself to market volatility.

4. Case Studies: When Cash Was Crucial

– 2008 Financial Crisis: Buffett invested billions into blue-chip stocks when others were panic-selling.
– 2020 COVID Market Crash: Berkshire Hathaway sat on over $100 billion in cash, waiting for true value opportunities.

The lesson: you can’t act when it matters if you don’t have cash ready.

Summary

Warren Buffett’s message is clear: in times of crisis, cash isn’t just a buffer—it’s a strategic tool. Whether you’re an investor or an everyday earner, building and protecting liquidity puts you in control when others lose theirs.

Think ahead. Hold cash. Be ready to act when it counts.

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