Yes, you read that correctly. Warren Buffett still lives in the same five bedroom home that he bought in 1958. The current value today is about $700,000.
So, does living in this home mean that Warren Buffett is miserly? He does have over $50 billion, and yet he stays in the house that he bought 55 years ago. It only has “just” five bedrooms.
Do you think he’s lying about the amount of money he makes? Of course not. It is known that he’s worth over $54 billion at the time of this writing. He’s currently the third richest person in the world.
So why is the third richest person in the world living in such a tiny house?
Well for starters, Warren Buffett is not miserly at all. He is stingy by no means. He’s 30 donated over $30 billion to charity. And he’s a master at creating wealth.
You can create wealth in a number of ways. One way is by investing. Another way is to avoid expenses that really aren’t necessary. That’s what makes a person frugal, and not necessarily stingy. Warren Buffett’s frugality is the reason he’s been able to grow such incredible wealth year-over-year.
Let’s break down Warren Buffett’s logic in simple terms…
Living in a home with an extra 10 rooms will not change things all that much. But if he uses the money that he could spend to buy a 10 room home, and invest it correctly the way he always does, he can turn it into 10 times the money that he already has.
Sure it’s tough for people to act like Warren Buffett. Some people might even say that Buffett can afford to be frugal since he already has so much wealth. He doesn’t need to worry about money at all anymore. And this is true to a degree, but he’s been this way even before he had all of his money.
So, with that said, here’s the way I see it…
If Buffett can do this on such a large scale, you can at least attempt to do it on a small scale. The true secret comes from enjoying and finding happiness in growing your wealth. Once you reach this level, you’ll have no choice but to repel its polar opposite, which is spending.
It may be tough for you to follow this advice in the beginning. But you need to learn to become accustomed to it, and realize that sacrificing consumption is a lot less painful than the long-term prospect of creating massive wealth.
Choose the simple things in life. You don’t need the most expensive phone that costs hundreds of dollars a month. Get a cheap plan to handle all of your needs at a fair value. You’ll save a lot of money, and begin creating wealth all at the same time.
The best way to do this is simple… Prioritize your needs, and spend less money on the things that you want, but aren’t necessary.