Berkshire Hathaway Inc. Chairman and CEO Warren Buffett is filthy rich and notoriously frugal.
Your frugality is not for personal gain. He has donated billions to various charities and signed the Giving Pledge, stating that more than 99% of his fortune will be dedicated to philanthropic causes during his lifetime or after his death.
Microsoft Corp. co-founder Bill Gates, one of Buffett’s close friends, recalls an incident in the 2017 annual letter published in Gates Notes. During a trip to Hong Kong, the billionaire duo decided to have lunch at McDonald’s. Much to Gates’ amusement, when Buffett offered to pay, he pulled out a handful of coupons.
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In the letter, Gates posted a photo of himself and Buffett, whom he jokingly referred to as “the big spender.” He continued: “He reminded us how much you value a good deal.”
Although both are among the richest men in the world, Buffett saves money however he can. On the way to the office, he stops at McDonald’s for breakfast and eats one of his three favorites: two sausage patties; a sausage, egg and cheese; or a bacon, egg and cheese. Like Buffett, Gates also likes fast food and often opts for classic dishes like cheeseburgers and Diet Coke.
Buffett’s simple choices don’t end with food. He has been living in the house he bought for $31,500 since 1958. He still drives a 2014 Cadillac purchased with hail damage. Before that, he drove an 8-year-old Cadillac. When he decides it’s time to buy a new car, he auctions off the old one for charity.
Buffett embraces his frugality with pride. “My life couldn’t be happier,” he said at Berkshire Hathaway’s annual shareholder meeting in 2014. “In fact, it would be worse if I had six or eight houses. So I have everything I need and I don’t need any more.”
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He has often said, “Do not save what is left after spending; instead, spend what is left after saving.”
For those inspired by Buffett, investing wisely can be a powerful tool for building wealth. While traditional stocks and bonds are common, investing in startups is another avenue. These young companies, although riskier, can offer significant returns if they are successful. Having a diversified portfolio that includes such investments can potentially maximize growth over time.
Here is a simple strategy to follow for anyone looking to manage their finances more effectively:
Set clear goals: Start with a clear savings goal for the year. Whether it’s for an emergency fund, a major purchase, or increasing wealth, having a goal helps maintain focus.
Automate savings: To avoid the temptation to spend, set up automatic transfers to your savings or investment accounts. This ensures that a portion of your income goes directly into savings before you see it.
Budget smart: After setting aside savings, use the remaining money for your monthly bills and needs and set aside some for leisure or unexpected expenses.
Take care of your savings: Treat the money in your savings or investment account as sacred. Resist the temptation to withdraw it due to impulsive purchases.
Let your money work: With the right investments, such as promising startups or other assets, your money can grow and generate returns that can further improve your financial health.
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This article Bill Gates recalls the time fellow billionaire Warren Buffett took him to lunch at McDonald’s and paid with coupons: ‘You offered to pay, reached into your pocket and pulled out… coupons!’ originally appeared on Benzinga.com
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