On Monday on CNBC, Lebron James, NBA superstar, asked Warren Buffett for financial advice.
“Through the rest of his career and beyond, in terms of earning power, [he should] just make monthly investments in the low-cost index fund,” said Buffett while he was on Squawk Box on CNBC on Monday. This answer was a response to a video question asked by Lebron James. “Somebody in his position ought to have a significant cash reserve.”
Buffett also told Lebron James that he needs to keep it simple while investing. “Athletes generally tend to get promoted by people with restaurants and real estate,” said the CEO of Berkshire Hathaway. “Everybody’s got an idea for him and, usually, the simplest is the best.”
Buffett also mentioned that James should primarily invest in American companies. “Owning the United States at a decent average price bought over time, you really can’t go wrong with that,” said Buffett.
The Oracle of Omaha also mentioned that somebody like Lebron James needs to continue with a simple investing strategy because of the demands on him as a professional athlete. “Their expertise is making a lot of money doing something they do extremely well, but they aren’t generally going to be able to take the time to become a professional investor.”
Lebron also asked Warren Buffett for basketball advice and the Omaha investor said jokingly, “We went up for a jump ball one time and he got it, went the length of the court [and] dunked it just as I was starting to jump, so he does have that much to learn from me.”