We see a lot of tips and tricks when it comes to proper money management. However, how effective can it really be, and how can we truly achieve financial success in this modern world? Warren Buffett has some words about it.
Considered by many financial advisors as the greatest investor of all time, Warren Buffett started having an interest in business at a very young age of seven. He knew deep inside that it was the right route for him, and his hunch was spot on.
Today, he holds the title of the third wealthiest person on Earth with a total net worth of around $82 billion as of July 2019. He’s also the chairman and CEO of one of the most successful businesses in the world, Berkshire Hathaway Inc.
He wanted us to achieve financial freedom like what he did so Buffett shared some key advice. Let’s take a look at what he has to say.
Save, Save And Save
Most people tend to sort out all the expenses first and places what is left in the table for their savings. That may not be the most ideal scenario if ever we want to achieve any financial stability in the near future. Warren Buffett said, “Do not save what is left after spending, but spend what is left after saving.”
To do this, you can set an automatic transfer from your payroll account to your savings account through your bank. Doing this will save you time and effort. Most of all, this guarantees the growth of your savings account without you having to worry about anything else.
Don’t Spend On Things You Don’t Need
A typical image that we have in mind when we talk about billionaires are huge and fancy mansions, posh cars, expensive jewelry, and other ridiculously overpriced stuff. However, that isn’t always the case, especially for Warren Buffett.
Even if he has a pile of money as high as a mountain, and he can acquire all the real estate property that he wants, the famed businessman still lives in the same house that he got back in the 50s. Well, that makes sense since his home is still serviceable and can still do the job of what it is supposed to do: shelter him and his family.
Most people, especially midde-class family, often times get sucked into the lifestyle upgrade after getting a slight increase with their paychecks. We see a trend that after they received additional income, their expenses will also follow through. He recommends keeping our lifestyle changes to minimal and focus more on how we could get back from where we usually were when it comes to our family budget.
Study Passive Income
Warren once said that “If you don’t find a way to make money while you sleep, you will work until you die.” This statement is true down to its very core. We need to find other sources of income especially those who bring money with little to no supervision.
If we figure this out closely, the answer may already be in front of us. We’ll give you some quick ways on how you can get passive income.
● Invest some of your resources in dividend stocks
● Create a publication like books and ebooks so you can ear royalties
● Utilize your hobby for added income by creating online courses and selling them for a price
Don’t Take Unnecessary Risks
Investments made in the stock market can sometimes bring you big rewards at a cost of bigger risks. However, Warren Buffett only makes long-term investments and doesn’t buy the idea of short-term trading. He also likes to play the long game where he is sure that he’ll get more profit rather than playing quick but lose everything.
Warren Buffett also believes that buying shares in the S&P 500 low-cost index funds is the way to go if we are looking for the most logical move when investment comes to mind.
Passion For Business
Mark Twain and Warren Buffett have a lot of things in common, and the most prominent is believing the quote “Find a job you enjoy doing, and you will never have to work a day in your entire life.”
As a young kid, he knew what he wanted to do for the rest of his life, and that is doing business. Up until today, even if he has more than enough money for his retirement, he chooses not to because he loves the challenges and the sweet success of investing money in a venture.
He also added that “without passion, you don’t have energy. Without energy you have nothing.” That means so much coming from the third richest person in the world.
Based on Materials from Bay ‘N Tree
Photo Sources: CNBC, Freepik, Peakpx, Blue Diamond Gallery