Considering that he is one of the richest men on the planet, it can pay big to listen to Warren Buffett. The American business mogul, investor extraordinaire and philanthropist is CEO of Berkshire Hathaway, which he grew from a fledgling business in 1964 to a multi-national holding company today.
Absorb these words of wisdom from one of the world’s wealthiest and most frugal men.
1. “It’s not easy to get rich quick.”
Yes, you could buy yourself a lotto ticket and win big, or your long-lost aunt could leave you her massive estate, but those are slim odds. Wealth accumulation occurs over the course of a lifetime. For most of us, the secret to getting rich is to do so slowly—setting aside dollar after dollar and even penny after penny and letting compound interest do its magic.
2. “If you buy things you don’t need, you will soon sell things you need.”
If you tend to splurge, this would be a great little jingle to memorize and repeat to stop yourself when you feel compelled to reach for a totally unnecessary item in the store or hit the “buy now” button on your computer.
3. “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Never underrate the power of planning and planting ahead. Sure, it’s a lot of work to lay a solid financial foundation. You have to do some digging and plant seeds and nurture them and watch them grow, but such legwork is the only way to ensure that you are financially covered in the future.
4. “Don’t save what is left after spending; spend what is left after saving.”
If you routinely pay your last bill of the month, only to discover that you have mere pennies left, reverse your tactics. Save first and then spend what’s left on your bills. If you’ve calculated correctly in terms of how much income and expenses you have and the amount you should be able to save, things will work out.
5. “Risk comes from not knowing what you’re doing.”
Ever noticed how much scarier something seems when you have no idea what to expect? The same goes for finances. Decrease your risk substantially by learning as much as you can about saving and investing from trustworthy, knowledgeable sources before taking a chance with your money.
6. “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
Life is difficult enough, so don’t make it any harder than it needs to be. If you’re thinking of investing, put your money into something you understand rather than in an area that baffles you.
7. “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
When once-in-a-lifetime opportunities present themselves and you validate their legitimacy, this is not the time to be stingy with your contributions. Take advantage by investing as much of your financial resources as you possibly can so you reap the biggest rewards possible.
8. “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
It’s common to become excited and start buying stock in a bull market and to retreat in a bear market when pessimism is at an all-time high, but contrary action leads to success. Remind yourself that the good times will come again and buy when few are buying.
9. “Tell me who your heroes are and I’ll tell you how you’ll turn out to be.”
Who you aspire to be says a lot about your priorities and values. If your hero drives a $75,000 car and plunks down $200 for dinner on a routine basis, expect to join him or her in the overextended credit card poorhouse. If, on the other hand, your hero drives a modest car and lives in a modest home (like Warren Buffett), expect to join that person in the house of financial stability.
10. “I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”
Perhaps most important is this maxim. If you truly believe that you will do well with your money and become wealthy, you will.
It’s that simple if you’re Warren Buffet. For the rest of us, these wealth management companies are a great place to start.
Julie Bawden-Davis is a widely published journalist specializing in personal finance and small business. She has written 10 books and more than 2,500 articles for a wide variety of national and international publications, including Parade.com, where she has a weekly column. In addition to contributing to SuperMoney, her work has appeared in publications such as American Express OPEN Forum, The Hartford and Forbes.