Warren Buffet has been heralded as one of the world’s most successful investors. Many people and investment companies follow his stock purchases, sales, and words of wisdom, such as gospel.
He also has some words of advice for those who are making dire mistakes with their money. According to Warren Buffet, there are 10 things that poor people waste money on that he would do differently.
Low-Value Investments
One of Buffett’s most famous money-making tips is known as the Buffett formula. His theory says to to go bed smarter each day.
According to Inc., Buffett recommends reading; he allegedly spends about 80% of his day reading and suggests that all successful people should read 500 pages per day. If you’re investing in something right now, be sure to read up on how successful it is or how you could fine-tune it.
Credit Card Debt
Unfortunately, credit card debt can be an ugly reality of life. Outside of major emergencies, Buffet recommends staying far away from putting too much money on a credit card, especially from frivolous purchases like dinners out and shopping.
Buffett told Yahoo Finance that he pays in cash “98% of the time.” The idea is the basic principle of not spending money that you don’t have.
Quantity Over Quality
Buffett wrote in his 1989 letter to Berkshire Hathaway shareholders that “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Another one of his general rules is to stop buying stocks just because they’re cheap. You may want to watch a stock for a while to see if it improves before buying in. Start prioritizing known winners over a larger amount of stocks.
Unnecessary Spending
until 2020, Warren Buffett allegedly still used a $20 flip phone before finally being convinced to upgrade to an iPhone.
The money-making mogul says that people should habitually save first and spend second.
New Cars
A luxury item that depreciates in value the second that you buy it is a new car. According to the Kelly Blue Book, most new vehicles have a 20% drop in value in their first year.
Buying a reliable used car and not having a monthly payment can be one of the best financial upgrades that you can make.
Full-Price Purchases
Even billionaires look for good deals. Buffett once took Bill Gates to a meal at a fast-food restaurant and used coupons.
Never think that you’re too good for a deal, sale, or coupon. If it fits into your budget, then it’s a good buy.
Regular Nights Out
A big waste of money that many people spend lavishly on is regular nights out on the town.
If you’re in a tight financial situation, unfortunately, big nights out on the town, dinners and shows, should be the first thing to go.
Wasted Opportunities
Even though he’s one of the richest men on the planet now, Buffett was once a young man without money or connections.
In his youth, Buffett would regularly pick up side gigs and make money by delivering newspapers, selling used golf balls, and even washing cars. He also looked for bigger opportunities or created them when he couldn’t find them easily.
Gambling
According to The Motley Fool, Buffett once called gambling “socially revolting.”
“I’m not a prude about it, but to quite an extent, gambling is a tax on ignorance,” he reportedly said, referring to the tax revenue generated by gambling but also thinks that gambling is an activity that too many down on their luck waste their finances on.
Living Beyond Their Means
One issue that people often make when they begin making more money is increasing their monthly bills.
During a meeting at Emory University, Buffett said that his goal is “not to make people envious” of his wealth or status. He also said that you cannot buy health or love and warned the audience not to confuse the cost of living with the standard of living.
How To Change Spending Habits
It might be difficult to alter life-long spending habits, but wealthy people often recommend taking small and practical steps to make better choices.
Even one small change a day can have a big impact on the future.
