According to Warren Buffett, an internationally renowned investor, there are at least 10 places where many people waste and lose their money.
According to Warren Buffett, one of the world’s most successful investors, there are at least 10 ways many people waste and lose their money.
Buffett is more than qualified to give the world pearls of financial wisdom, and his advice is worth listening to, especially if - as in this case - it helps those who listen to it avoid making financial mistakes and losing money. A lot of money.
10 ways you’re losing your money
Here are 10 ways you’re wasting your money, instead of saving.
1. Not investing in yourself
"The most important investment you can make is in yourself," according to Buffett. "That’s how you acquire knowledge. Like compound interest."
One of the most famous pieces of advice given by the investor, known as the Buffett formula, is to go to sleep every night smarter than you were in the morning.
How? Buffett recommends reading. The Oracle of Omaha spends about 80 percent of his day reading and suggests that anyone hoping to achieve success should read 500 pages a day.
If you’re currently investing in something other than yourself, it might be time to reconsider your strategy.
2. Gambling
At the 2007 Berkshire Hathaway shareholders meeting, Buffett called gambling "socially repugnant."
"I’m not a prude, but to some extent gambling is a tax on ignorance," he said, referring to the tax revenue generated by gambling.
If you have extra money, don’t waste it on gambling.
3. Quantity over quality
"It is far better to buy a wonderful company at a fair price than a fair company at a great price," Buffett wrote in his letter to Berkshire Hathaway shareholders in 1989.
So you shouldn’t invest in something just because it’s cheap. Although he’s talking about investing in companies, the same advice can be applied to your everyday life. When you prioritize quantity over quality, the short-term benefits aren’t as impactful, and you expose yourself to the risk of paying more in the long run.
4. Unnecessary spending
Buffett isn’t interested in having the latest gadgets or designer brands. The investor used a $20 flip phone for several years before upgrading to an iPhone in 2020.
His advice? "Don’t save what’s left after you spend, but spend what’s left after you save."
leggi anche
How much will the iPhone 16 cost?
5. Buying new cars
Cars are depreciating assets. On average, most new vehicles experience a 20% drop in value in the first year. So instead of buying a new car, Buffett prefers to buy used vehicles at a discount.
"The truth is, I only drive about 3,500 miles a year, so I rarely buy a new car," he said.
| If you need a new car and want to save money (up to $10,000), you should know how government car incentives work. |
6. Buying at full price
Warren Buffett is always careful about saving money. Years ago, Buffett treated Bill Gates to a meal at a fast food restaurant and used coupons to pay.
"Remember the laugh we had when we traveled together in Hong Kong and decided to have lunch at McDonald’s? You offered to pay, reached into your pocket, and pulled out... coupons!" Gates wrote in his (and now ex-wife Melinda’s) 2017 annual letter.
"Melinda just found this photo of me and ’the big spender.’ It reminded us how important a good deal is," Gates wrote, using the anecdote to launch a digression on the value of philanthropy.
7. Too many nights out
Buffett eats a very simple diet and doesn’t like to go out much. In her biography, "The Snowball: Warren Buffett and the Business of Life," author Alice Schroeder quotes the investor as saying:
"I like to eat the same thing over and over again. I could eat a ham sandwich every day for fifty days straight for breakfast."
8. Missed opportunities
In his early years, Buffett worked odd jobs and earned money delivering newspapers, selling used golf balls, and polishing cars. He was always looking for new opportunities, and when he didn’t find them, he created them.
9. Too much credit card debt
Buffett is known to be against credit cards and the fees they come with. He prefers to rely on cash instead of using a card. "I have an American Express card, which I got in 1964," he said, "but I pay with cash 98 percent of the time."
10. Living beyond your means
When you go shopping and see something you like, ask yourself if you really need it or if you just want it.
At a 2009 meeting at Emory University, Buffett said his goal is "not to make people jealous." He also said that you can’t buy health or love and warned the audience not to confuse the cost of living with the standard of living.
Original article published on Money.it Italy 2024-08-13 16:59:38. Original title: 10 modi in cui stai sprecando i tuoi soldi (e come rimediare)
