Here’s what you can learn from Warren Buffett, a self-made billionaire!
As of 2024, Warren Buffet is the tenth richest person in the world, with his net worth estimated to be around $135 billion.
This self-made billionaire has made his fortune from investment success, and he is also a big fan of frugality.
One would expect a man of his standing to be living lavishly in a $100 million lakeside home, much like his good friend Bill Gates.
Buffet is definitely one of the people in the world who can easily afford to live like a Kardashian, but he doesn’t!
Why is that? The 93-year-old CEO and chairman of Berkshire Hathaway likes to live frugally and does not want to live the high life, even if he could easily do so.
He appreciates frugality so much that his license plate once read “THRIFTY,” and believe us, it was not lying!
While the everyday American cannot phantom reach such a level of richness as Buffet, there are many things we can learn from his frugality that we can easily apply in our lives too!
To see how you can easily save money and have a fulfilling life, let’s look at some advice from the Oracle of Omaha’s prudent mind!
1. Choose a modest home
Together with his late first wife, Susan, Buffet bought a home in Omaha for $31,500 back in 1958.
And the billionaire still lives there! It is not a tiny home by any means, since it is a five-bedroom, 2.5-bathroom home, but he also hasn’t traded it for a mega-mansion once his investments started to make him a ton of money.
We will be fair and mention that he did get a vacation home in 1971 for $150,000, located in Laguna Beach, California. But these are the only homes the billionaire owns.
The sweet home for Buffett has always been his Omaha one, and he has always been an advocate for not having a bigger home than you need.
2. Don’t discredit coupons
Buffet’s motto in life has always been that if coupons save you money and you have them, then you should use them.
And he has always been a true believer in them, encouraging people not to be hesitant about using them even when they are surrounded by friends.
There is nothing wrong with taking advantage of a good deal, and sometimes coupons are the best ones you can find.
Bill Gates even recounted in a letter back in 2017 that once they were in Hong Kong, the two went to a McDonald’s.
Buffet offered to pay, and he pulled out coupons for the store from his pocket, which impressed and surprised both Bill and his then-wife, Melinda.
This little memory has always been one that the other billionaire kept in mind, even noting how much Buffet loves a good deal.
So if a billionaire can use coupons, there is nothing wrong with you using them! Do not let anyone tell you otherwise!
3. Avoid vices like smoking and drinking
Buffett likes to surprise people, and while many would expect him to be a smoker or to enjoy fine alcoholic drinks, the billionaire actually does not.
He has never enjoyed either, and he is of the mentality that they steadily require you to pay money for them, and they have a negative effect on your health.
So not only will you need money for these vices, but you will also have to potentially pay more in medical bills down the road.
And given that Buffett is 93 and still with us, we tend to believe his reasoning is very sound.
4. Do NOT gamble
There is one saying about gambling that always rings true: “The house always wins.”.
And Buffett also counts this as a potential vice to avoid, along with the ones we have mentioned earlier. However, his stance is even more strict, going on record saying that “gambling is a tax on ignorance.”.
He went so far as to place a slot machine in his home and give his kids their allowance in dimes.
The billionaire knew the kids would not be able to resist the lure of a potential easy win, but he also got their allowances back the same day he gave them.
It was an easy way to teach them what all smart investors like Buffett already knew: gambling doesn’t pay. So do yourself a favor and avoid anything of the sort.
5. Upgrade when you need to, not because you want to
This goes for any electronics you may have around. We have all become used to overconsumption, even when we have devices that are still working well.
Buffett was notorious for using a Nokia flip phone for years until he made the switch to an iPhone, probably when it became a necessity to use a smartphone.
Yet, this anecdote about his phone history reveals an important life lesson: the man is not going to drop a lot of money for the latest and greatest piece of technology.
And when you take into consideration that most tech pieces like phones are not that different from one year to another, there is no need to upgrade every time.
For him, it is all about being intentional with your purchases and not wasting money on frivolous things.
6. Shop deals and sales
Warren Buffett is a man who appreciates quality, but he also loves a great deal. No matter what he is buying, he is going to be looking for a good deal and the best price for that item.
He wrote in a shareholder letter in 2008 that, be it socks or stocks, he would always get the quality item for the marked-down price.
A man with his fortune can easily buy anything whenever he wants; there’s no need to jump on marked-down items; however, he is an investor through and through, and he never downplays the value of a deal.
So why should we not use the same device in our day-to-day lives?
7. Hold onto your car
Let’s be clear: Buffet’s car is anything but cheap since he spoke about his Cadillac XTS luxury sedan back in 2014 with Forbes.
However, he also revealed that he does not change his car as often as many people would expect him to do, given the amount of zeros in this bank account.
He admitted that he seldom is in the market for a new car, given that he drives pretty infrequently, so there is no need for him to get a new car that often.
Given that he is now 93, we doubt he drives as much as he used to anyway.
What can we learn from this? It’s about quality and being intentional again.
You can buy a good car, take care of it, and drive it for years instead of always being on the lookout for an upgrade. This means that you would have invested your money wisely!
8. Choose minimalism
Warren Buffet is not in the business of having a lot of items. He believes that having too many possessions will end up “possessing its owner,” and in the end, it can be true.
You can end up being caught in a loop of needing to own things, be it for status or for appearances, and when you are a man of his status, it can be a slippery slope. Despite being able to own a lot of things, the billionaire seems content with only what he needs to live comfortably.
His most prized possession, aside from his health, is having diverse, interesting, and loyal friends, which is a sentiment we do not see often in rich and powerful men.
However, what else could we have expected from someone who has pledged to donate more than 99% of his wealth to charity?
Sure, it is easy for someone like him to say things like this, but the sentiment still stands. Be intentional with your money and do not fall into the capitalist trap!
To learn more from Buffett and his way of thinking, we recommend his book: The Essays of Warren Buffett: Lessons for Corporate America.
Warren Buffett is not the only self-made rich person who talks about the importance of frugality! While we are used to the likes of celebrities flaunting their riches, the true 1% are much more low-key. To learn more money-saving tips from a self-made millionaire, check out this article about Bernadette Joy!
