10 Simple Habits That Helped Warren Buffett Become So Ridiculously Wealthy

Warren Buffett is one of the wealthiest people on earth; Forbes puts his current net worth at more than $142 billion. Despite his exorbitant wealth, Buffett has some unique ideas about how to make and hold onto wealth. 

If you’re looking for some solid financial tips on how to save and invest, Buffett has been outspoken about some of the simpler secrets to his success.

Here are 10 easy-to-follow tactics Buffett used to become the billionaire he is today.

Buffett has spoken many times about the importance of patience when investing, advising others not to sell as soon as trouble appears. It’s guidance he has been following himself since he was 11 years old.

Buffett purchased his first stock, a share of Cities Service, for $38 back in 1942. His fortune has grown exponentially in the decades since because he continues to buy stocks he considers a good value and hang on to them throughout the ups and downs of the market.

When speaking to a class at Columbia Business School in 2000, Buffett stressed the importance of keeping up with investment news and being well-read. 

In fact, he told students to “read 500 pages” a day of material related to whatever their ambitions were.

“That’s how knowledge works,” he told the class. “It builds up, like compound interest.” That knowledge can then be used to make better, more informed business decisions.

Buffett is famously frugal and, despite massive wealth, has spent decades in the same home in Omaha, Nebraska, that he purchased in the 1950s for $31,500. 

He’s known to drive modest cars and run them as long as possible as well, not seeing the value in upgrading when a car, or a house, is working just fine as is.

Buffett’s discipline can be a lesson on how to avoid unnecessary spending. And it’s a simple formula for anyone looking to meet a savings goal: spend less, save more.

Buffett is avidly against building up debt, telling a University of Notre Dame crowd in 1991 that he’s “seen more people fail because of liquor and leverage — leverage being borrowed money.”

The Berkshire Hathaway CEO advises against taking on credit card debt in particular, citing high-interest rates that can really take a toll if bills are not paid promptly. He said he would not have the wealth he has today if he’d made a habit of borrowing.

Buffett’s patience and discipline when it comes to saving (and investing) are legendary. 

A particularly famous Buffett anecdote involves the billionaire refusing to bet even $1 while playing a game of golf with friends, stating he’d never waver in his financial disciplines just for the thrill of a gamble.

This discipline can be seen in many other areas of Buffett’s life as well — from the home that he’s lived in for more than 50 years to the careful way he holds onto stocks despite market turmoil.

Investing intelligently goes far beyond thinking about how much money you want to put where, according to Buffett’s philosophy. The billionaire is a major advocate of investing in yourself — body and mind.

Putting time into improving your skills or making yourself a more valuable employee or client, for example, can pay off big down the line.

“Anything you do to improve your own talents and make yourself more valuable will get paid off in terms of appropriate real purchasing power,” he told CNBC during a 2009 interview.

Whether you are saving for a house, trying to pay off debts, or looking to build wealth through an investment portfolio, Buffett’s advice is to think about financial goals long-term.

This goes hand-in-hand with being patient and staying pat through volatile phases in the stock market. 

In his 2014 letter to Berkshire Hathaway shareholders, Buffett said investing should be thought of on a “multi-decade horizon” and that gains and purchasing power should be planned out carefully and should grow over your “investing lifetime.”

Buffett also suggests resisting the temptation to put all your cash into investments, noting that when bills come due, the cash needed to pay them can’t be tied up.

“At a healthy business, cash is sometimes thought of as something to be minimized — as an unproductive asset that acts as a drag on such markers as return on equity,” Buffett wrote in a 2014 Berkshire Hathaway report. 

“Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”

Like implementing a healthy diet and exercise habits, good financial habits can be developed over time and can really make a difference when it comes to building wealth.

Some healthy money habits that Buffett continually refers to during interviews are making saving a priority and carefully tracking cash flow — and the man practices what he preaches. 

In a 2019 interview, he told Yahoo! Finance that he has a credit card (that he got in 1964), but 98% of the time he pays for his everyday basics in cash, noting “it’s just easier.”

In another letter to Berkshire Hathaway shareholders, Buffett said that it’s important to look hard at the value to avoid overpaying — and this same guidance works whether you’re buying “socks or stocks,” he said.

He advises looking for “quality” investments when they are marked down to avoid overpaying. 

Try to do this by keeping track of fluctuating prices and buying at low points, but make sure you are buying quality, that is, that the price is likely to rise again.

While it’s unlikely that the average American will be able to build wealth to the degree that Buffett has, his simple savings and investing tactics are habits that any savvy spender can adopt.

Even taking on just a few of Buffett’s habits — like avoiding money problems and investing in yourself — can lead to incredibly positive changes in your life and financial situation.

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