What Can We Learn from Warren Buffett?

You might think that someone as wealthy as Warren Buffett lives quite differently from the rest of us, and therefore his own financial habits wouldn’t really work for the average person. But actually, these surprising facts about Buffett cast light on some habits and choices that the rest of us should consider as well!

He has lived in the same home for over 60 years. Buffett still lives in his Omaha, Nebraska home that he purchased for just $31,500 more than 60 years ago. Sure, the home has undergone some renovations since then, and it’s now worth about a million dollars. Buffett saw no point in turning his home into a competition, preferring to buy and hold onto a property that increased in value over the years.

He eats McDonald’s for breakfast. Junk food might not be the wisest choice for most of us, for other reasons. But Buffett reports that he typically spends $3.17 on breakfast each morning, starting off the day on a frugal note. Small daily purchases add up over time!

He drives used cars. Buffett knows that brand-new cars depreciate in value the minute you drive them off the lot, and that makes them a poor investment. Instead, he drives a used Cadillac, and trades up very infrequently.

He doesn’t care about name brands. After using a $20 flip phone for many years, Buffett just finally upgraded to an iPhone last year. He also reports never using the device’s more high-tech functions.

He focuses on necessity. Buffett converted a dresser drawer into a crib for his first child, and borrowed a crib for the second. He says, “if you buy things you don’t need, you will soon sell things you need.” In other words, spending money unnecessarily could lead to sacrifices later.

He rarely uses credit cards. Preferring to use cash 98 percent of the time, you won’t spot Buffett whipping out a credit card. Following this trick can help you to avoid spending money that you don’t have, and racking up debt.

And with regard to saving… Buffett once famously said, “do not save what is left after spending, but spend what is left after saving.” That’s a particularly great rule to apply to your retirement planning. If you feel the need to adjust your retirement plan, let’s schedule an appointment. We can help you determine how much you should be saving for retirement, so that you can then budget the rest of your money accordingly.