Should you ever go entirely to cash?

Question

Rich Dad · Accepted Answer

If you’re 100% in cash, you’re not investing — you’re hiding.
Going entirely to cash is a defensive move, not a wealth-building move. The rich use cash as dry powder, not as a mattress. I go heavy cash only when I see massive bubbles, irrational euphoria, or when I’m preparing to strike on a once-in-a-decade opportunity. Cash is a weapon — but only if you plan to deploy it.
If you’re going to cash because you’re scared of volatility, that’s emotional investing. Markets fall. That’s the entry fee. Instead of going all cash, ask: Should I rebalance? Should I hedge? Should I shift into cash-flowing assets? The wealthy don’t retreat — they reposition. Sitting entirely in cash long-term guarantees one thing: inflation quietly stealing your future.

Poor Dad · Answer

Sometimes the safest move is stepping out of the storm.
Yes, there are times when going mostly to cash makes sense — especially if you’re near retirement, need liquidity for a major purchase, or can’t emotionally handle market swings. Capital preservation matters. You can’t afford to lose 40% if you need the money next year for a home, tuition, or living expenses.
But entirely to cash? That should be temporary and strategic. Inflation erodes purchasing power every year. A better approach is adjusting your allocation based on age, risk tolerance, and financial goals. Think about your pension, emergency fund, and timeline. Cash should provide stability — not replace long-term investing.

Should you ever go entirely to cash?

Rich Dad Says

Poor Dad Says

Whose advice would you follow?

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