It’s no secret that Warren Buffett has a fantastic mind for business and investing. While many people admire Buffett for his great success, the billionaire seems pretty confident that anyone could accomplish what he has done. Buffett offers plenty of insight and quite a bit of entertainment in the world of finance; here are 9 of the highlights.
1) Educate Yourself
This is very, very imporant. Since Buffett thinks that “risk comes from not knowing what you’re doing,” you should definitely try to educate yourself about finances. It’s no secret that Buffett is a huge supporter of reading to educate yourself, so check out one of his recommended books to get started.
2) Form Healthy Habits
“I think the biggest mistake is not learning the habits of saving properly early, because saving is a habit,” Buffett once said.
If you’re reading to start learning more about the world of finance, you are already on a good path to forming healthy habits— but we are talking money habits. Be mindful of your money habits, both good and bad, and try to break the cycle of the bad while reinforcing the good. Your savings account will thank you!
3) Invest in Yourself
“Invest in yourself as much as you can. You are your own biggest asset by far,” Buffett once said, “Anything you invest in yourself, you get back tenfold. Nobody can tax it away; they can’t steal it from you.”
This ties wonderfully into educating yourself and creating healthy habits. Educate yourself and do thinks that make you happy while on the road to your financial success.
4) Stay Out of Debt
“I’ve seen more people fail because of liquor and leverage— leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing,” Buffett said back in ’91.
While Buffett does advise not to take out any loans unless absolutely necesarry, he is especially wary of credit cards. Buffett thinks that if he was borrowing money with a 18% interest rate, such as some credit cards, that he would be broke too! Avoiding debt and focusing on living and saving within your means is a good way to get ahead financially.
5) Shop the Sales
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it’s marked down,” Buffet said in his 2008 shareholder letter.
This is an easy lesson for life, and Buffett’s frugality is one of the many reasons we love him. Just make sure the value matches (or exceeds) the price you are offered, or you’d be losing money— which is a big no from Buffett.
6) Invest in a S&P 500 Fund
A lot of the advice from Buffett are quotes that you have to decipher and figure out how to apply to your life, and then some is simple. Here is a nice actionable tip for anyone ready to hop in an investment:
“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund… you’ll do better than 90% of people who started investing at the same time,” Buffett advises.
7) Money is Long-Term
It may no longer come as a surprise to hear that Warren Buffett always thinks long term. If you think about your finances early in life and responsibly take care of your money, you can better enjoy financial successes later on in life. When Buffett looks for an investment he focuses on something that will be successful for decades to come, not the biggest fad.
8) Don’t Lose Money
“Rule number one: Never lose money. Rule number two: Never forget rule number one.”
Pretty self-explanatory; If you lose money, you’d have to work harder to earn that money back before you could start at square one again.
9) Give Back
“If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%,” Buffett once said at a fundraiser for Hillary Clinton.
Don’t worry, Buffett is no where near all-talk. The billionaire quickly become the top philanthropist in the country when he began donating Berkshire Hathaway stock to various charities, mainly the Bill and Melinda Gates Foundation, back in 2006. Even if you aren’t quite in a position to give back financially, you can still enrich other peoples lives.