I was reading a financial magazine last week about the world’s known billionaires. It discussed what their latest financial net worth and some of the things they did to reach their apex and what they did to help out people.
It also discussed how one of them gave away most of his wealth retaining only 250 million for his own expenses. Whoa! That’s still a lot of money in my opinion! I could live a financially independent life on half of 1% of that for the rest of my life!
Well, the other day I got to watch a few minutes of Warren Buffett’s speech to a Financial Education Forum in Omaha. Warren Buffett is considered as the best investor of the 20th century. Yes, he is a billionaire many times over!
He is probably the most respected and admired billionaire in the elite group of known billionaires. When he speaks, a whole bunch of people listen because almost all of his investments got profitable, he maintains a simple life, lives in the same neighborhood and drives an 8-year-old car.
Here’s some of the sage financial advice he told the young students:
He said two things can hold you back:
Lack of education (in my opinion, not necessarily a college education)
Habits that you develop
He said it’s very important to start creating good habits that will lead to success while you are still young. When you’re 50 to 60 years old, it will be hard to develop them because your habits are set. I disagree with him on this point – I think it’s not too late to develop good habits at any age.
Pick out the person that you admire most. Write down the character traits that make you admire him or her. Then work on acquiring those habits for yourself.
Think about the person that is repulsive to you. What bad attributes does that person have? Do not develop those habits.
Choose to have integrity. He mentioned that when his company hires new employees, he looks for three attributes: integrity, intelligence and energy. He said that all of the students have intelligence and energy, but they still have to choose whether to have integrity or not.
One very significant piece of advice he mentioned is to avoid credit cards. If you start a revolving debt on a credit card, you will pay 18 -20% interest. You can’t make a lot out of your life if you are constantly paying 18 to 20 percent interest. You can make a lot of money by lending at 18-20% but you won’t want to be on the other side: the one paying the interest.
If you can’t pay for it, DON’T buy it. Put yourself in a position where you pay CASH for it.
I think the above advice about credit cards is something that needs to be learned by a lot of young and old people (who haven’t figured out yet how to manage money properly). It needs to be taken to heart and practiced daily.
The video was about an hour. But the first 16 minutes are the most interesting. You can watch it in youtube: the title is “How to Stay Out of Debt – Warren Buffet” (I am giving you the title because I tried linking it but it won’t work properly).
Have fun watching! I hope his advice will help you develop good habits for your future success!
This is a part of the Building Wealth Series