If you’re looking for investment advice or aspire to financial greatness, Warren Buffett may be the ideal role model. Buffett, well known for his holding company Berkshire Hathaway, has an estimated net worth of $105.2 billion, according to Forbes.
Surprisingly, Warren Buffett was not born with a silver spoon in his mouth. He started from humble beginnings, but by the age of 30, he had built a net worth of $1 million. This is why many believe Buffett knows a thing or two about accumulating riches. If you want to know the best investments to make or how to make a million dollars, he’s the guy to look up to.
Here are some of Warren Buffett’s tips to becoming a millionaire:
1. Develop an entrepreneurial mindset from an early age
Buffett had a talent for thinking outside the box and coming up with innovative ways to make money as a young adult. He worked as a newspaper deliveryman and ran a pinball machine business. So, take a cue from Buffett: if you want to become a millionaire, don’t wait till you’re older. Look for ways to earn more money, and if you have it, create a savings strategy and begin investing.
2. Learn to reinvest your profits wisely
If you earn from an investment, don’t grab it and go. Instead, adopt Buffett’s investment philosophy and reinvest your winnings.
Buffett started a pinball machine business with a friend when he was a teenager. They began with a single machine and a $25 investment. Instead of spending all of their proceeds on teen-related items, they used the money to buy more machines, eventually amassing a total of eight machines in several places. Buffett used some of the earnings from the sale of the pinball machine firm and opened up another business.
3. Avoid unnecessary debt
Starting or expanding a business requires a certain amount of capital, and some people rely on loans to do it. Warren Buffett’s advice in this regard: avoid needless credit card debt and loans.
“If you’re smart, you’re going to make a lot of money without borrowing. I’ve never borrowed a significant amount of money in my life,” Buffet said.
If you must borrow, borrow as little as possible. If you want to make millions of dollars and need to borrow, only borrow what you need at a low, fixed interest rate. Then, as quickly as possible, pay off the debt.
4. Live simply
Want to make a million like Buffett? Remember to emulate his lifestyle as well as his investment strategies. People tend to spend more as they earn more. They improve their homes, cars, and vacations. But Buffett isn’t like that. Despite his wealth, he leads a modest life.
The more you spend, the longer it will take you to reach your first million dollars. If you live simply and cut back on spending, you will have more possibilities to save, invest, and profit from compounding interest.
5. Surround yourself with people who will inspire you
Buffett recommends surrounding oneself with individuals who are superior than you. Remember that the people in your life can either motivate you to do good or bad things. To succeed, you must imitate successful individuals.
“Pick out associates whose behavior is better than yours, and you’ll drift in that direction,” Buffet said.
6. Take advantage of great opportunities
Opportunities don’t knock every day, and Buffett’s best investment choices show that he’s the type to grasp them. When addressing students at the University of Georgia, he advised them to seize huge possibilities in life.
Buffett said, “We don’t do very many things, but when we get the chance to do something that’s right and big, we’ve got to do it. And even to do it on a small scale is just as big a mistake almost as not doing it at all. You’ve really got to grab them when they come because you’re not going to get 500 great opportunities.”
There are numerous ways to become a millionaire, including some that may surprise you. But, to get you started, here are four words: Think like Warren Buffett.
Meanwhile, if you are already thinking of taking your step towards investing, you can look up 7 Pandemic-Proof Business Ideas under P10,000.