While investors across generations continue to follow legendary expert Warren Buffett’s invaluable market advice, the billionaire’s frugal lifestyle also grabs the headlines and speaks volumes about his money-saving habits.
The market veteran, often called the ‘Oracle of Omaha’, recently passed on the baton of Berkshire Hathaway’s leadership to his successor Greg Abel. But Buffett’s legacy will likely live on for generations to come, and inspire investors.
Here are four invaluable lessons that one can learn from Buffett’s lifestyle.
Focus on value
Buffett still lives in the Omaha house he bought for $31,500 in 1958. The five-bedroom home is now worth about $1.3 million, but Buffett says he would never trade it because it holds memories of raising his three children. He also avoids splurging on expensive cars. The legendary investor drives a 2014 Cadillac XTS—complete with hail damage—because, in his words, giving up half a day to shop for a new car isn’t worth it. He even once had a license plate that read “THRIFTY,” a fitting symbol for one of the world’s richest individuals who chooses to live simply.
“I do not think that standard of living equates with cost of living beyond a certain point,” Buffett said at a Berkshire Hathaway shareholders meeting in 2014. “My life would not be happier—it would be worse if I had six or eight houses or a whole bunch of different things I could have. It just doesn’t correlate," he added. Whether it’s mansions or sports cars, Buffett avoids major purchases that reflect his wealth, believing they may ultimately detract from his happiness.
Quality over quantity
In his 1989 letter to Berkshire Hathaway shareholders, Buffett wrote, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price." This is relevant in today’s times when strong market volatility often makes investors panic and make more trades, instead of remaining patient and focussing on quality.
Frugal lifestyle
Billionaire investor Warren Buffett once famously treated fellow billionaire and Microsoft co-founder Bill Gates not at a fancy restaurant, but at his favourite McDonald’s — and that too using coupons. This famously simple act speaks volumes about the market veteran’s frugal lifestyle.
In Bill and Melinda Gates’ 2017 annual letter addressed to their longtime friend Buffett, Gates shared a story about a lunch they had years ago. “Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket, and pulled out… coupons! Melinda just found this photo of me and ‘the big spender.’ It reminded us how much you value a good deal,” he wrote.
Know how valuable your time is
Bill Gates in a Linkedin post had listed out things he learnt from Buffett. “There are only 24 hours in everyone’s day. Warren has a keen sense of this. He doesn’t let his calendar get filled up with useless meetings. On the other hand, he’s very generous with his time for the people he trusts. He gives his close advisers at Berkshire his phone number, and they can just call him up and he’ll answer the phone,” he wrote.
Also read: What is Warren Buffett’s best investment ever? It is not a stock
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
