Warren Buffet is one of the world's wealthiest men, but spends like a struggling middle class professional. Although we can't all be worth billions, we can all learn from his example of spending less than he earns.
So here's the thing about Warren Buffet. He's worth about $45 billion, but he came from a regular working class family and those values are part of what has made him one of the world's wealthiest individuals. In his biography, The Snowball, readers learn some of the rules he follows to this day that can teach everybody a thing or two about personal finances.
Find Opportunities
As a child, Buffet made money by selling snacks door-to-door from a little red wagon. As an adult, he researches and invents ways to make money. The next time you need some extra money, look for ways to make it happen.
Buy What You Need
And only what you need. Even now, Buffet still lives in the small suburban house he bought when he got married. He is known for being extremely frugal in all things, despite his wealth. Live not only within your means, but beneath them.
Take Calculated Risks
You can't get ahead in your finances without taking a few risks, but always research and assess those risks to make them as safe as possible. The few hours you'll spend checking out a purchase or investment will pay off far more than you would have earned spending those hours at work.
Play the Long Game
Buffet is said to never trade stocks, but only to invest. He rides out momentary dips in market prices and relies on the general upward trend of successful companies and economies. Your personal finances may suffer from occasional bumps and bruises, but that's never a reason to abandon your long-term goals.
You don't have to be an entrepreneur to consider Warren Buffet's advice. Applying just one of the above mentioned tips is guaranteed to further strengthen your financial foundation.
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On backtaxes and other likely unpaid tax comments, Buffett's company has investments that have gone up in value over many years. No capital gains taxes will be due until those investments are sold. Much the same as anyone who may have bought a condo or something to rent out will not have to capital gains taxes on their property until they sell is.
Some more trivia - I believe it was an old VW Beetle Buffett drove in his earlier years despite being a multi-millionaire in his 20s or 30s.
Everyone needs to Google lucky sperm club and Buffett for his views on money and wealth.
He has also said this:
"My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well... I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious." - Source: Buffett Says 'Capricious' Economy Requires Charity (Update1) by Hugh Son, Bloomberg, June 16, 2010
One of Buffett's, kids, his daughter recently said that he keeps his cars forever and that they have to tell him when his car is getting embarrassing and that he saved money buying his current car because it had hail damage.
1. Mr. Buffett owes $1 billion in back taxes. He doesn't, nor does Berkshire Hathaway, his company. However, like many huge conglomerates whose tax returns are enormous, they are audited by the IRS. Sometimes those differences take years to resolve.
2. He engages in insider trading. He doesn't, nor has he ever been charged with that.
3. He pays no taxes. Actually, he does pay tax, but it is a paltry sum when compared to his net worth. Be that as it may, the amount of money he donates to charity every year is much higher than any conceivable tax he would pay.