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Warren Buffett's 14 Best Lessons on How to Live Simply and Build Wealth

Warren Buffett certainly doesn’t need to pinch pennies, but the billionaire has some great advice on how to do it.

By Laura Gesualdi-Gilmore

Edited by Jeff White

Updated Oct. 4, 2024

Despite his exorbitant wealth, Berkshire Hathaway CEO Warren Buffett has some surprisingly simple advice on how to build wealth.

According to Forbes, the 93-year-old investor and philanthropist has a net worth of around $145 billion. Buffett’s financial advice is surprisingly practical, and he often provides guidance that works for everyone.

Here are 14 brilliant things Buffett can teach you about money.

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Stay in the same home

Many would assume one of the smart money moves billionaires of Buffett’s caliber would be something like eating up prime real estate to build wealth — perhaps buying a few homes in the priciest areas around the world.

However, Buffett sees the benefit of living modestly. In fact, he’s spent more than 60 years living in the Nebraska home he bought for just over $31,000 in 1958.

The billionaire apparently sees no reason to upgrade when the five-bedroom home meets all his needs. This is a practical attitude to adopt for people looking to build wealth.

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Opt for cheap food you enjoy

It’s not all lobster and caviar for this billionaire. In the past, Buffett has claimed that he eats “like a 6-year-old.”

That may include a packet of Oreos for breakfast or a pit stop at McDonald’s when he’s feeling famished. Buffett’s philosophy tends to revolve around not splurging where it’s not needed.

Figuring out how not to splurge on your food can be a surefire way to lower some financial stress from your life.

A recession is a great time to invest

For those looking to make some quality investments, a recession doesn’t have to be a financial disaster.

In fact, in a 2008 opinion piece for the New York Times, Buffett wrote that “bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”

Buffett also stressed the importance of patience, noting that buying during a recession can help investors avoid high prices if they are willing to hold off on their purchases and wait for the market to turn.

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Keep your car as long as possible

Buffett is not the type of billionaire to show up with an extravagant new car every month — or ever.

In fact, he told Forbes in 2014 that he drives so infrequently that he looks for bargains when buying cars and then keeps them for as long as possible.

In a BBC documentary, Buffett’s daughter Susie even said her father will keep cars for so long that she eventually has to tell him his wheels are “embarrassing” and it’s time to upgrade.

Wait to buy a home

Buying a piece of property is obviously a good investment for anyone who is expecting to stay in the same area for a significant amount of time.

However, Buffett advises against purchasing a home before you’re ready to avoid being “cleaned out.”

During a 1998 Berkshire Hathaway shareholders meeting, Buffett told a story about how he decided to hold off on buying his first home himself until the down payment was about 10% of his net worth.

Avoid credit card debt

Buffett has gone on record many times advising anyone looking to grow their wealth to get rid of credit card debt first.

Many Americans carry credit card debt and don’t often think about how much monthly interest payments add up, but paying down debt is an important step.

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Don’t go designer

Why splurge on designer goods and clothing when you could go for quality instead? Buffet prefers to look for well-made goods that he can get a lot of use from.

For example, when it comes to his suits, Buffett prefers to buy from the Chinese creator behind Dalian Dayang Trands: a woman named Madam Li, who impressed him with her entrepreneurial spirit and excellent suits.

Clip coupons

No matter how far you go in the business world, there’s value in jumping at a good deal. Despite Buffett’s massive wealth, he’s been known to pull coupons out of his pocket.

Longtime friend and Microsoft co-founder Bill Gates wrote about a particular experience in 2017 when the pair pulled up to a McDonald’s, and Buffett offered to pay with some coupons he had stashed away for the meal.

If it ain’t broke, don’t fix it

One of the running themes you’ll notice if you read up on Buffett’s financial advice is to avoid unnecessary upgrades.

He’s lived in the same house since the 1950s, rarely buys new cars, and has remained in the same Omaha, Nebraska, office building since he started working at Berkshire Hathaway in the 1960s.

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Be resourceful to avoid unnecessary spending

Anecdotes about Buffett’s past suggest that he sees a real value in learning to be thrifty — sometimes in the extreme sense.

In Roger Lowenstein’s 1995 biography of the billionaire, "Buffett: The Making of an American Capitalist," he recounts that Buffett used a dresser drawer as a bassinet for his first child and borrowed a crib for his second one.

These are just two examples of the famously frugal businessman pinching pennies anywhere he could.

Smart money habits can be learned

In a 2007 speech at the University of Florida, Buffett discussed the importance of good habits — especially good financial habits.

Those looking to meet money goals, like saving a certain amount or devoting a percentage of income to investments, should examine their finances closely and see if any habits can be changed.

Money-saving habits don’t need to be complex, either. For example, you could get in the habit of picking up takeout meals instead of ordering delivery. Every little bit helps.

Invest in yourself

Buffett also advises those looking to build wealth to invest in themselves whenever possible.

Anything you can do to make yourself more valuable — whether that is earning another degree, getting a certification, learning a new skill, or even taking care of your health — can (and likely will) pay off down the line.

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Avoid temptation to invest everything

Buffett advises against putting everything you have into investments.

In a letter to Berkshire Hathaway shareholders last year, the billionaire noted that the company always holds at least $30 billion in cash and cash equivalents.

Why? Because they always want to have the cash they need on hand so the company, their creditors, insurance claimants, and shareholders can all “sleep soundly.”

Make long-term money goals

Buffett stresses long-term goals when it comes to both investing and building wealth.

The billionaire once famously wrote, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes,” in a 1996 letter to shareholders.

Financial challenges are normal and should be expected. Buffett strongly advises against jumping ship on an investment the second trouble nears and instead, thinking about financial goals as lifelong commitments.

Bottom line

Buffett is famous for making wise investment choices, which have earned him a coveted spot on the list of the wealthiest people on earth.

However, his wealthy money moves — most of which revolve around finding creative ways to save — can be adopted by anyone looking to build wealth.

The biggest takeaways from Buffett’s financial philosophy are probably just to avoid spending when it’s not absolutely necessary and stay devoted to investments for the long haul.

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