I was recently click-baited into a story that Warren Buffett, arguably the world’s greatest investor, has as a secret weapon that explains why he’s so successful. The irony is I fell into the story, despite the fact that I knew what it was!
After seeing it again, however, and recognising how it’s such an important thing to never forget, it’s now forged forever on my mental hard disc!
So what is it?
Buffett’s long-time business partner, Charlie Munger, explained what it is in a speech at the University of Southern California 12 years ago. This is what he said: “If you take Warren Buffett and watched him with a time clock, I would say half of all the time he spends is sitting on his ass and reading!”
Directed clearly at these students, Charlie gave them the greatest piece advice ever: “Without lifelong learning, you’re not going to do very well. You’re not going to get very far in life based on what you already know.”
That’s so spot on.
Last week I looked at the 10 steps I’d love to influence all young people or any 40-something who’s disappointed with their track record in building wealth, to take to turn around their money fortunes.
And in this article, I want to change would-be money-makers or wealth-builders’ attitudes towards a whole lot of things in life that can make or break someone’s goals to get richer. Some of these suggestions are so basic but normal people sometimes ignore the most common ways to be successful.
What follows is what I got when I read Larry Washka’s Complete Idiot’s Guide to Getting Rich, which I was asked to adapt for the Aussie market in 1999.
I’ve called it the guru’s guide to getting in the rich zone, as Larry has been a legend of US money for decades. Sometimes my media mates like to put that guru tag on me.
These are the pinpointed seven winning habits of the successful wealth builders that Larry and I have found over the many years we have been watching
Here they are:
- Save every month.
This is a habit that many people need to cultivate, just as football player might go for a run every morning. Thinking about saving and seeing it as virtuous will stimulate you to actually see savings you’ve ignored. And you’ll get a kick out of discovering new ways to save money that you’ll then use to get richer.
- Stay out of dumb debt.
Good debt can be a good wealth-builder! Debt that leads to capital gain is good debt. If it’s tax deductible debt, it’s even better. But you have to become an expert in credit card debt where you get the lowest rates of interest and you use the credit-free periods like a rock star investment banker.
- Shop around before buying.
Research reading on your big purchases is a big saver but it can be a big winner if you search for bargains as a matter of course.
- Don’t be afraid to buy pre-loved goods.
This is a US number but I’ve heard the same here that: “A new car depreciates or loses value almost immediately after you drive it off a dealer’s lot. As a quick rule of thumb, a car will lose between 15% and 20% of its value each year according to Bankrate.com.”
- Take care of your stuff.
This is so basic but so smart. Think of the costly outlays for repairs you forked out on because you neglected your car, your roof, your health!
- Become a share market player.
Aussies are programmed to be property buyers but shares are foreign to so many people. Thankfully, our compulsory super system makes us all exposed to the wealth-generation power of stocks. Read about them and you might one day start investing after a stock market crash, which can be a great time to buy fantastic companies’ shares at ridiculous prices that one day could make you really wealthy!
- Take time to plan your future.
Yep, I recommend you get into planning. You should make plans to get wealthier, healthier, smarter, more qualified, to have a better network and even to be happier. A happy person has a much better chance of being successful. And this is not just me saying this.
Harvard academic, Shawn Achor has written a book called The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work. This might be a decent book to read for anyone who’d prefer money success over money failure!