…Warren Buffett
Yahoo! Finance featured an post by Serah Louis about billionaire (yep, BILLIONAIRE) Warren Buffett, one of the richest men in the world and CEO of Berkshire Hathaway. He is known for both his investing savvy and financial frugality. Mr. Buffett doesn’t fit into the standard clichéd billionaire mold. Even with a $100-plus billion net worth, he keeps a “regular kind of guy” persona which makes him easy to relate to. Much of his financial advice is simple and doable.
Note: Please, do not mistake “simple and doable” for easy or guaranteed. His suggestions are easy to understand and actionable, but still require real work on our part.
Let’s discuss two of my favorites from the post.
Number 5: He doesn’t splurge on brands
“…Buffett avoids unnecessary spending and once said, “Do not save what is left after spending, but spend what is left after saving.”
Not being a brand person myself, I do love this one. Mr. Buffett didn’t carry the latest cell phone, but instead carried a $20 flip phone, YES a $20 flip phone, until 2020 when he finally upgraded.
Because of this fun fact, I am officially no longer ashamed of the 2015 LG sitting by my side as I write…LOL
Fun Fact: 99% of Warren Buffett’s wealth was earned after his 50th birthday, so it is not too late to start!
When you think of it, he could buy any phone he wanted and upgrade every month and it would not affect his net worth at all. However, he chooses not to spend money when he doesn’t need too. I’m sure he was around others who have half his money but a much nicer/newer phone. It didn’t matter. It was more important to him to route his funds to investments or where it can be put to better use. That’s being financially efficient. I am sure Mr. Buffett does splurge on something, and he is far from walking around this planet looking homeless, but his mindset is something we can emulate.
Brands are a lot about marketing. Getting the right people to wear or promote your product to influence the masses (aka us) to spend $200 on an item with a manufacturing cost of $20. Google searching retail markup I found ranges from 50 to 350%. This would be okay if quality increased by the same ratio. The higher price meant a higher quality product. That doesn’t consistently happen. So my advice is to shop for quality, not brands or even quality, and reroute the saved funds to savings or where it can be used more effectively. Practice financial efficiency.
Number 8: He finds creative ways to save
“…“If you buy things you don’t need, you will soon sell things you need,” the billionaire says. Buffett watches out for the small expenses before they can add up and comes up with creative solutions to avoid spending more than he has to.”
It’s funny that a man worth $100-plus billion would say that, but it is true. Even the Bible states “…little foxes spoil the vines…” (Song of Solomon 2:15). In our financial lives those small expenses or habits that don’t cost a lot when looked at individually could be actually costing you hundreds or thousands of dollars over months and years. The amount is syphoned off so slowly it almost doesn’t even register or it is easier to excuse because “it isn’t that much”.
Plus, coming up with creative ways to save can be challenging.
As I say often, budgeting isn’t sexy…LOL.
However, I think for some, it could be more about establishing the habit of saving regularly. One suggestion I make often is to set an extremely low weekly or per pay period saving goal. Forget about “big picture” things like college, retirement, or emergency savings, and only concern yourself with saving this on small amount consistently. The goal isn’t to reach a certain amount, but to establish the act of saving and retaining the funds.
As the habit becomes ingrained in you, increase the amount. You will notice that even with a more challenging amount the routine of saving with keep you on track.
These are my two favorites habits, but there are seven other mentioned in the post.
-
- Which was your favorite?
- Which one do you feel you is a challenge?
- Which one surprised you?
Email me your response, or message me on Facebook. I would love to know your thoughts.
Until Next Time…
Thanks and Be Blessed
Learn more about BBIC
Disclaimer