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<\/p>\nWarren Buffett’s frugal habits can help you save money just like a billionaire, but if you had billions is this the life you want to reward your efforts? NO!<\/p>\n
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In my opinion he is not someone to emulate; and Warren Buffett might have billions of dollars to his name, but unlike other celebrities and financial gurus, he prefers to live life simply, for the most part.<\/p>\n
The investing icon practices what he preaches when it comes to financial discipline, saving and paying off debt<\/a>.<\/p>\n Buffett gave an early warning last May about today\u2019s higher prices when he told a livestream audience of over 28 million during Berkshire Hathaway’s annual meeting that “substantial inflation” was already hitting businesses.<\/p>\n When one of the world’s most successful investors raises concerns about rising prices, it\u2019s probably a good time to apply some well-tested strategies to tighten your belt. Here are nine ways Buffett’s frugality can help you save and spend wisely.<\/p>\n While most billionaires bulk up on expensive real estate, Buffett originally paid $31,500 for his Omaha, Nebraska, home \u2014 that\u2019s about $289,000 in today\u2019s dollars \u2014 and he\u2019s lived there for over 60 years<\/em>.<\/p>\n His home is by no means tiny, however. The 6,570-square-foot, five-bedroom house has had plenty of renovations and additions over the decades and is worth about $1 million today. It\u2019s also protected by fences and security cameras and most likely has a good homeowners insurance policy<\/a> as well.<\/p>\n Buffett has no plans to move out, calling the house \u201cthe third best investment I ever made,\u201d in a 2010 letter to Berkshire Hathaway\u2019s shareholders.<\/p>\n Buffett\u2019s one-and-only mortgage was on a vacation home in Laguna Beach, California, that he purchased in 1971, although he certainly had the cash to afford the $150,000-listed seaside property.<\/p>\n He told CNBC that he took out the 30-year mortgage loan because \u201cI thought I could probably do better with the money than have it be an all-equity purchase of the house.\u201d He decided to use the extra cash on hand for shares in Berkshire Hathaway \u2014 the company that brought him billions.<\/p>\n Buffett’s point about not locking up capital still resonates. And if you own your home, you have options to free up some of your capital by refinancing quickly at today’s historically low rates before they rise this year, as forecasters expect. A switch may save you thousands of dollars a year<\/a>.<\/p>\n While Buffett could simply have a personal chef cook him a gourmet breakfast, he often grabs Mickey D\u2019s on his way to work. He says he doesn\u2019t like to spend more than $3.17 on his morning meal.<\/p>\n \u201cWhen I\u2019m not feeling quite so prosperous, I might go with the $2.61, which is two sausage patties, and then I put them together and pour myself a Coke,\u201d he says in HBO’s 2017 documentary Becoming Warren Buffett<\/em>. He continues: \u201c$3.17 is a bacon, egg and cheese biscuit, but the market\u2019s down this morning, so I\u2019ll pass up the $3.17 and go with the $2.95.\u201d<\/p>\n Instead of going out for meals or buying a latte from Starbucks every day, make your own lunches and coffee. And when you buy online, you might be able to get a better deal with some help comparison shopping<\/a>.<\/p>\n Many billionaires and millionaires keep a collection of flashy sports cars and vintage models in their garages, but Buffett allegedly prefers fixed-up automobiles that he can acquire at reduced prices.<\/p>\n He upgraded from his 2006 Cadillac DTS to a Cadillac XTS for just $45,000 in 2014. “The truth is, I only drive about 3,500 miles a year, so I will buy a new car very infrequently,\u201d he told Forbes.<\/p>\n Whether you opt for a brand-new car or a slightly used model, emulate Buffett by spending within your limit. That means you won\u2019t want to go for the first loan you spot and should look around for better deals. A good habit is to do a quick check of auto insurance rates<\/a> every six months.<\/p>\n Buffett doesn\u2019t much care for designer suits or the latest iPhone model \u2014 he relied on his $20 flip-phone for years before swapping it out for the Apple smartphone in 2020.<\/p>\n Buffett avoids unnecessary spending and once said, \u201cDo not save what is left after spending, but spend what is left after saving.\u201d<\/p>\n Park your funds in a high-yield savings account or in a diversified investing portfolio<\/a> so the money can grow over time. Set aside your extra cash for an emergency fund or retirement instead of blowing it all on nonessential purchases.<\/p>\n \u201cI\u2019ve never borrowed a significant amount of money in my life. Never. Never will. I\u2019ve got no interest in it,\u201d he told students at Notre Dame in 1991.<\/p>\n Although a young Buffett once borrowed 25% of his net wealth to buy shares, he warns investors against repeating the same mistake.<\/p>\n Even skilled stock traders will tell you borrowing to invest can be risky. And there\u2019s no real need with investing apps that allow you to start with a small amount of money, like one that lets you invest your “spare change”<\/a>.<\/p>\n Buffett credits some of his success to his passion for investing. \u201cYou have to love something to do well at it,\u201d he says, urging people to take the jobs they love, instead of positions that look good on your resume.<\/p>\n Even if you can\u2019t quit your full-time job to focus on the things you truly enjoy, you can certainly find the time for some affordable hobbies. Buffett himself enjoys card games and playing the ukulele.<\/p>\n And if you\u2019re looking for a way to boost your income, capitalize on your skills and hobbies and set up your own side hustle<\/a>.<\/p>\n When Buffett\u2019s first child was born, he converted a dresser drawer into a bassinet. For his second, he borrowed a crib.<\/p>\n \u201cIf you buy things you don\u2019t need, you will soon sell things you need,\u201d the billionaire says.<\/p>\n Take a good, hard look at your finances and figure out where you can cut down on. Get yourself a library card and borrow books and movies instead of purchasing them. Or try a budgeting app<\/a> to monitor your spending habits.<\/p>\n\n
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