I love studying wealthy and successful people. Most successful people tend to have a lot of similar habits even if they are in different industries or made their money in different ways. One of my favorites is Warren Buffett, currently the third richest person in the world.
After watching “Becoming Warren Buffett” and reading this great article I realized how much I admire the billionaire investor.
He’s a genius in a ton of ways but he is also a very down to earth guy who is unlike any other billionaire. Regardless of your status in society or your net worth, these money and life lessons will help change your life.
Who doesn’t want to be like the third richest person in the world?
Before we get started with his ten habits here are some amazing facts about Warren.
Who is Warren Buffett?
Why should you care about money lessons from Warren Buffett? Probably because…..
- His net worth of 75.2 BILLION dollars (currently 3rd richest person in the world)
- 95% of his wealth was earned after his 50th birthday
- He has the longest track record for beating the market (via Business Insider)
- If you invested $1,000 in his company, Berkshire Hathaway, in 1980 it would be worth $458,351 in 2016
- In 2013 he earned $37 MILLION PER DAY
- Someone once paid $3.4 million to have lunch with Buffett
“Do not save what is left after spending, but spend what is left after saving.”
I’ve always tried to pay myself first by contributing to a 401K or Roth IRA with automatic deductions. If you save or invest your money before it hits your bank account you won’t be tempted to spend instead of saving.
I recommend automating your paychecks to ensure your money is automatically dispersed to meet your savings goals.
Live Below Your Means
Even though he is worth 70+ billion he still lives in the same house he bought in Omaha, Nebraska for $31,500 in 1958! Who does that!?
Nowadays is someone gets a promotion or raise the common practice is to think how you can keep moving up. The problem?
If you start earning more but spending more you’re right back in the same position as before. I’m not sure I’ll ever be as frugal as Warren but it’s important to always to live below your means.
Read A Lot
In the HBO documentary, Warren said he reads at least 500 pages per day. Check out more on the science behind his reading routine here.
In one of my favorite books, Rich Habits, the author found that 67 percent of rich people limited TV time to one hour or less per day, compared to only 23 percent of poor people.
As much as I love Netflix my TV habits have significantly decreased after learning this fact. If you need any starters check out my top five recommended personal finance books.
Learn to Make Passive Income
“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffett
It’s often said that the average millionaire has seven streams of income. If a millionaire has seven I can only imagine how many a billionaire has.
The main point? Don’t trade your time for money as your only way to earn.
Here are easy ways to create passive income:
- Invest in dividend stocks
- Publish a book or e-book for continued royalties (Learn how to write a book in 10 simple steps)
- Create and sell a course on something you’re knowledgeable about (photography, blogging, sports, etc)
Remember as Warren said to, “never depend on a single income, make investments to create a second source.” This is why I highly recommend starting a side hustle to ensure you aren’t solely dependent on one income stream.
Invest in Yourself
Warren and I agree that the most important investment you can ever make is in investing in yourself. He has said in several speeches I’ve heard that “invest in as much of yourself as you can, you are your own biggest asset by far.”
Here are some ways to start investing in yourself:
- Listen to podcasts
- Read every day
- Attend seminars
- Try new classes or activities
- Take online courses
As Warren has said, “Do not put all of your eggs in one basket.” Check out his other investment strategies here:
Play The Long Game
Warren only invests in stocks that he plans to hold for a long time. He is the definition of investing for the long term, he is not a short term trader.
Warren has always resisted fads or short term investments. Instead, his company has holdings in classic companies like Coca-Cola, Johnson and Johnson, Kraft-Heinz Company and Geico.
His rule is to only invest in companies that you understand how they make money. If not skip it or invest in the market with the S&P 500.
Invest in the S&P 500
If you’re not a huge investor, the S&P 500 is simply the 50o biggest companies in the US. By choosing to invest in the S&P 500 you are essentially buying a fund that owns all 500 companies. By owning one share you are essentially owning a piece of each company.
As he said this CNBC interview, “Consistently buy an S&P 500 low-cost index fund. “I think it’s the thing that makes the most sense practically all of the time.”
Hang Out With Winners
Do you hang out with people that lift you up or bring you down? Do your friends inspire and motivate you or ones are they negative and depressing?
Don’t be afraid to ditch these friends and focus on ones that will help better your life. As Warren said, “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
If you need some more inspiration check out my top six people to follow or listen that changed my life.
Create Good Habits
I’ve blogged a ton about how habits can impact your life every single day. Make sure your life is centered around positive habits.
Check out my book to see the top 20 habits to live a life of health and wealth.
Find Your Passion
Warren is a huge fan of finding your passion. He says that by eight years old he knew he wanted to be an investor.
Not all of us will be that lucky but finding my passion is why I left the corporate world. He has said “without passion you don’t have energy. Without energy you have nothing.”
Passion is the reason Warren is 86 years old and still works every day. To him, it doesn’t feel like work because he loves what he does and will do it forever.
Related Read: 7 Ways to Find Your Passion Now
Warren plans to give away 85% of his fortune to the “Giving Pledge” which was founded by Bill and Melinda Gates. His children will get the remaining 15% percent.
As of 2006, he has already given away roughly 37 billion to charitable foundations and organizations to help solve some of the major problems in the world.
One of my 30 Goals this year is to continue volunteering at the animal shelter and help feed 25 families for Thanksgiving.
The lesson? Earning money is important but don’t be greedy. Find ways to give back and you will most likely earn more in the long run and help others in need.
10 Lessons From Warren Buffet
When it comes to being successful I choose to only follow the advice of people I would trade places with. Warren Buffet, the “Oracle of Omaha” is one of those people.
Make sure to follow these ten life lessons from Warren:
- Save often
- Live below your means
- Read everyday
- Invest in yourself
- Diversify your investments
- Make money while you sleep (passive income)
- Hang out with winners
- Follow your passions
- Create good habits
- Give back
How many of these habits are you doing? Are there any you disagree with? Let me know in the comments!
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