Finance

[Jonn]

Warren Buffett: 10 Things Poor People Waste Money On​

Warren Buffett, one of the most successful investors in the world, has a reputation for his simple financial wisdom. His advice is certainly worth listening to, especially if it helps you avoid making money mistakes.

“The most important investment you can make is in yourself,” Buffett has said, according to Inc. “That’s how knowledge builds up. Like compound interest.”


One of Buffett’s most famous tips, known as the Buffett formula, is to go to bed smarter each day.


According to Inc., Buffett recommends reading. He spends about 80% of his day reading, and he suggests that anyone hoping to achieve success should read 500 pages per day.


If you’re investing in something other than yourself right now, it might be time to rethink your strategy.

MSN

 

[Raggamuffin]

I reas the article and it all seems like common sense.

We live in a society which features rampant advertising. People think their lives are incomplete without owning something new. It's also awash with "Buy now, pay later" nonsense. So much technology and companies also exist nowadays which promote instant gratification and laziness.

Ed

 

[Forest Cat]

These days the economy is so crappy that people struggle even if they don't waste money I think.

 

[Jonn]

These days the economy is so crappy that people struggle even if they don't waste money I think. A billionaire telling people what poor people waste money on, I'm sure it's well meant but it looks a little bad.

I believe he wasn't always a billionaire.
I wasn't financially independent when I first started employing some common-sense principles.

 

[Forest Cat]

I believe he wasn't always a billionaire.
I wasn't financially independent when I first started employing some common-sense principles.

Yes, I understand.

 

[Jonn]

Yes, I understand.

There are some common-sense things that improve a person's financial position.
Not everyone is going to become financially independent, however.

One of the first lessons I learnt about 32 years ago was not to by an expensive car and pay it off.
It was better to invest most of the money into something that would add to your financial position, and not depreciate.

There was a period where I would limit myself to spending $1 a day on food, so I could pay off my mortgage.
Of course, this assumes someone has regular employment.
Many on the spectrum don't, unfortunately.

What I have noticed, over the years, is that it is common for young ppl to live for today, and damn tomorrow.
"Eat, drink, and be merry, for tomorrow we die.".
I guess I was rather a-typical in this, when I was at that age.

 

[Jonn]

BTW:

If you can afford drugs, you can afford to save.

 

[Forest Cat]

You're right, there are common-sense financial things people should pay attention to. Especially young people.

 

[717]

I don't find anything Mr. Buffett say to be inspirational. If you ignore what he says in interviews and pay attention to what he does in the business he runs, then you will clearly see what he really thinks.

The rest of the post kind of confuses me... Lest assume a mortgage is 3% a year. If you have any way you can make more than 3% profit on investment, then you are better off inventing the money than paying the mortgage earlier. This I find true for pretty much any loan. If you can invest the money and make more than the interest, then investing the money will be a better use of the money than paying for the thing.

 

[Jonn]

It sounds stupid, but I have actually lived like that for a while now. And I'm not 18. It's stupid. But it's just because deep down I know I don't have a reason to care about it. I live alone, the house is paid in full, family gone, no kids, the economy is crap here now and will probably get worse and I'm getting older. Damn tomorrow.

But you're right, there are common-sense financial things people should pay attention to. Especially young people.

I was like that after COVID hit.

I was thinking:
I might as well enjoy some of my hard-won gains bc I might die of COVID tomorrow.

I created a new will, and spent quite a bit (for me) for about a year.
I now look back and consider that period as temporary insanity. lol

I guess it was another phase I had to go through.
Now that I have moved on, I am more myself again.

 

[Jonn]

I don't find anything Mr. Buffett say to be inspirational. If you ignore what he says in interviews and pay attention to what he does in the business he runs, then you will clearly see what he really thinks.

Buffet makes good points, here and there.
As Ed said, a lot of what he says is common sense.

The rest of the post kind of confuses me... Lest assume a mortgage is 3% a year. If you have any way you can make more than 3% profit on investment, then you are better off inventing the money than paying the mortgage earlier. This I find true for pretty much any loan. If you can invest the money and make more than the interest, then investing the money will be a better use of the money than paying for the thing.

Australia has some advantages when it came to property investment that other countries don't have.
For those others, investing in shares might be a better.

I have sold all my investment properties and now have shares.
Much less hassle.

 

[Neonatal RRT]

It can be said that the very wealthy have a very different relationship with money than others, and in part, this comes about when you can live on say, less than 10% of your net income. The very wealthy live on a fraction of 1% of their net income. They see money as a means to make more money, that is, investing in assets and minimizing/eliminating liabilities. It's simple business acumen that can be applied to their lives. One of the reasons why you can't "tax the rich" is because they put everything they can into the business, the cars, the houses, the yachts, the artwork, etc. On paper, they don't own things, and you can't sue them personally, but rather you have to go after the business. They invest heavily and they can only be taxed on that if they sell those stocks for a profit (capital gains), like Elon Musk a few years ago when he sold stock and had to pay $10,000,000 in taxes. That's our tax code, and I don't think the wealthy decision-makers are going to change that in order for them to "pay their fair share".

Now, having said that, this very same tax code applies to the rest of us "poor schmucks". If you are an entrepreneur, then you can apply many of these strategies. If you are an hourly or salaried worker, it becomes more difficult because you don't have the opportunities for tax write offs. Some of us live on 90% or more of our net income, where simple living expenses become overwhelming.

Do many of us spend money on a ton of crap we don't NEED but WANT? Oh, yeah. Do we spend too much on automobiles, houses, recreational vehicles, lawn tractors, big screen TVs, computers, and so on? Oh, yeah. The poor and middle classes spend almost all of their income, by necessity or by mindset or by poor self-discipline, there are many reasons for this, and this is what drives economies. Can you get yourself out of financial holes? Many times, you can, but it is going to be painful. Can you make the right investments on your investment apps, like Robinhood and the like? Yes, you can. Doing it right now. Everything has risk, and you have to be OK with that risk, which is a mindset that you must have in order to invest.