Warren Buffett: The “biggest mistake” people make with their money and savings | WSI

Warren Buffett, the infamous Oracle Of Omaha, 91 years old, he’s worth around $100 billion and could clearly spend frivolously. But Buffett is a firm believer in learning how to save properly, and his advice on how to use money is very popular with the financial community and even those new to investing.

Buffett’s tips for saving

Under the current scenario, many wonder if this is correct. save money now, in times of high inflation. But professionals argue that even now it is essential to have savings which indicates on average around 3 to 12 months of savings set aside to cover essential expenses in a safe place. Do you need some inspiration to do it? Here are some of Buffett’s most famous quotes about saving.

“The biggest mistake is not learning the habit of saving properly.”

In a speech to college students, Buffett said the “biggest mistake” is “not learning the habit of saving properlyHe also noted that “most behaviors are habitual” and that “the chains of habit are said to be too light to be perceived until they are too heavy to break.”

An easy way to save money? Make it automatic. It’s advice you’ve probably heard a thousand times, but that doesn’t make it any less effective. Establish automatic transfers directly from your paycheck, immediately after being credited, to your savings accounts at regular intervals. In this way you will never touch the money, but you will set it aside. Then each year, if you can, try to build up your savings (many people use the beginning of the year to review their finances).

“Whether it’s socks or stocks, I like to buy quality products when they’re low.”

In his 2008 letter to Berkshire Hathaway shareholders, Buffett stated that “the price is what you pay; value is what you get“.
To avoid losing money by paying a price that doesn’t match its value, Buffett suggests save by buying discounted items. “Whether it’s socks or stocks, I like to buy quality products when they’re discounted,” Buffett said.

The good news for consumers is that for both stocks and Titles there are deals going on right now as markets are down this year and many items are overstocked at places like Walmart malls because inflation is driving consumers to spend less.

“Do not save what is left after spending, but spend what is left after saving.”

Basically, save first and once you’ve saved as much as possible, you can afford to spend. For his part, Buffett is also in favor of spending in cash. “I have an American Express card, which I got in 1964,” he told Yahoo Finance. “But I pay cash 98% of the time.”

Who is Warren Buffett?

Famous billionaire investor at the head of the Berkshire HathawayWarren Buffett is one of the richest men on the planet with a personal fortune of $117 billion, the legendary 91-year-old American investor is only behind Elon Musk, Jeff Bezos, Bernard Arnault and Bill Gates in world wealth rankings, according to Bloomberg Billionaires Index. This is the first time in the last 12 months that Buffett has returned to top five after falling to 11th place in October.

The credit is due to his growth in his ability to diversify his investments in Berkshire Hathaway, whose shares started the year up 7%. Although 40% of Buffett’s stock portfolio is made up of Apple, which itself is down 10% this year, its broad diversification has allowed the group to weather the high-tech stock selloffs seen at this start. early.

Unlike the five richest men who started 2022 with losses, Buffett’s fortune grew by $7.8 billion in 2022. Compared, Musk, the richest man in the world, lost $62 billion, weather doors he saw fizzle out $12.5 billion of your assets. Also Mark Zuckerberg, who had a net worth of more than $120 billion in January, saw his fortune drop by $54 billion to coincide with the crash in Facebook stock.

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