By Clay Wyatt, Contributor
If you're looking for a positive role model for your kid, Warren Buffett should be high on your list. The self-made billionaire's net worth is now an astounding $67.6 billion as of this writing. To put that into perspective, the 84-year-old Oracle of Omaha could purchase over 384,900 homes at the current median sales price!
While it won't be easy for your child to accumulate that kind of wealth, he can get started early by thinking like Buffett. Here are a few tips to get the ball rolling.
How to Teach Your Child to Be Like Warren Buffett
1. Be Proactive
Buffett didn't get rich via luck. He got started early and worked at it every day.
The investing legend visited his father's stock brokerage as a child and chalked up stock prices on the blackboard, according to Bio. He made his first investment at age 11.
By age 13, he started his own paperboy business and sold a horseracing tip sheet, filing his first tax return that year. And in high school, he and a friend bought a pinball machine business and ultimately sold it for $1,200.
To be like him, your child shouldn't simply wait for that high-paying job to come along after college. He needs to think like an entrepreneur early on. A few business ideas to consider include:
- Garage cleaning and organizing service
- Senior errand service
- Yard service
2. Set Goals
Based on Buffett's philosophy, your child could develop several goals to improve his long-term financial prospects.
One goal could be to spend what's left after saving -- not the other way around. This means he should create a budget covering the necessities and determine how much of the remainder he wants to save. Anything left over after saving his weekly allowance or income from a part-time job could be spent on entertainment or other non-essentials.
Another could be to invest as early as possible. As mentioned, Buffett began investing at age 11 and his experience has obviously paid off. While there are no guarantees in the stock market, the historical average annual return is 11.5 percent. The earlier your child invests, the more exposure he'll have to the stock market, which will likely lead to more wealth in the long run.
3. Practice Frugality
You'd think the world's third richest man would live in a golden palace. However, Buffett lives in the same house he bought for $31,500 in 1958. It's safe to say he could afford something much more luxurious today, but he chooses to live below his means.
According to Investopedia, Buffett does not bother accumulating unnecessary items, as he views the expense and maintenance of such items as a burden. So if you want your child to have more wealth than he could imagine when he's an adult, teach him to avoid wasting money now.
4. Have Integrity
Buffett didn't get rich by investing in companies with lackluster leadership. He looks for two qualities in the CEO before making his decision: energy and integrity. He defines the latter as the ability to say "no." As an example, according to MoneyWatch, the founder of a food products marketing company he purchased, Pampered Chef, turned down runaway growth early on because she thought her company needed a year of consolidation before taking on additional customers or people.
As Buffett's wealth suggests, he doesn't invest in many poorly performing businesses; it appears there's a correlation between integrity and success in the business world.
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