Money is we all love and love saving it too but then when its all about saving and becoming rich, let’s hear it from the mogul itself. These 5 magic Warren Buffett tips are sure thing to take note of.
1.Never lose money: Warren Buffett’s No. 1 piece of advice for 2016 is one he follows as closely as he can: “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” This rule applies readily to investing — if you’re working from a loss, it’s that much harder to get back to where you started, let alone earn gains.
2.Form healthy money habits: “Most behavior is habitual,” Buffett said in a 2007 address at the University of Florida, “and they say that the chains of habit are too light to be felt until they are too heavy to be broken.” Habits are changeable, but the earlier you start, the better.
“I think the biggest mistake is not learning the habits of saving properly early, because saving is a habit,” Buffett said. Pay attention to money habits and work to strengthen those that help your finances, and break those that hurt your finances.
3.Avoid debt, especially credit card debt: Warren Buffett built his wealth by getting interest to work for him instead of working to pay interest, the way many Americans in debt do. “I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” Buffett said in a 1991 speech at Notre Dame. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.”
Buffett is especially wary of credit cards. His advice is to avoid them altogether. “Interest rates are very high on credit cards,” Buffett once said in a news release. “Sometimes they are 18%. Sometimes they are 20%. If I borrowed money at 18% or 20%, I’d be broke.”
4.Invest in yourself: “Invest in as much of yourself as you can. You are your own biggest asset by far,” Buffett said, according tocom. He echoed those sentiments in a CNBC interview when he said, “Anything you do to improve your own talents and make yourself more valuable will get paid off in terms of appropriate real purchasing power.”
Those returns are big, too. “Anything you invest in yourself, you get back tenfold,” Buffett said. And unlike other assets and investments, “nobody can tax it away; they can’t steal it from you.”
5.Learn about money: Part of investing in yourself should be learning more about managing money. As an investor,Warren Buffett surely finds that much of his job is limiting exposure and minimizing risk. And “risk comes from not knowing what you’re doing,” Buffett once said, according to Forbes. The more you know about personal finance, the more security you’ll have as you minimize risks.
The lesson from this Buffett quote, then, is to actively educate yourself about personal finance. As Buffett’s partner, Charlie Munger, put it, “Go to bed smarter than when you woke up.” Buffett’s formula for this is simple: Read a lot. “That’s how knowledge builds up, like compound interest,” he said, according to The Week.