Large cash balances feel safe and quietly lose purchasing power. The question is how much is genuinely reserve.
Uncertainty tends to push balances into cash. That is reasonable for a defined reserve and expensive for everything beyond it.
The practical exercise is to size the reserve deliberately — months of spending, known near-term outlays, a buffer for the business — and then treat the remainder as investable.
Phasing the remainder back in on a schedule removes the need to pick a moment, which is the part that keeps people in cash.
For informational and educational purposes only. This material is not intended to provide, and should not be relied upon for, tax or legal advice. Tax laws and their application vary based on individual circumstances and are subject to change. The availability and potential benefits of the strategies discussed depend on each business owner’s specific circumstances, transaction structure, and applicable law. Consult your tax and legal professionals before implementing any strategy discussed.