#4: It’s better to hang out with people who are better than you
Warren Buffett made his first investment at 11 years old. He bought 3 shares of Cities Service Preferred at $38/share. It was the first of many investments for the current billionaire who still lives a frugal lifestyle.
Buffett still lives in the Omaha, Nebraska, home he bought in 1958 and has no problem driving in an old car. He also eats at low priced fast food restaurants such as McDonald’s rather than eating at expensive restaurants.
Buffett’s focus on saving money is part of the reason why he‘s maintained and built upon his current success.
Buffett has shared some insights over the years about saving money, but these five insights stand out. They’ll inspire you to pocket some extra cash and get more intentional with each purchase you make.
“If you buy things you don’t need, you will soon sell things you need.”
Buffett can buy several islands, mansions, and Lamborghinis and still have billions of dollars left over. However, spending carelessly on things you don’t need will result in sacrifices later down the road.
The amount of money you have doesn’t determine your likelihood of going broke. Rather, it’s the way you approach money.
A millionaire who carelessly spends money is more likely to go broke than a frugal investor who makes $50,000 every year.
This is why some professional athletes go broke despite making millions of dollars throughout their careers. Professional athletes without financial discipline may spend their earnings on over the top luxury cars, clothing, and other non-essentials.
Rather than buy on impulse, think about what truly matters and what you want to do in your lifetime. Opportunity cost surrounds us with every purchasing decision we make.
“Don’t save what is left after spending; spend what is left after saving.”
If one of your defaults is to save every extra dollar you make, you’ll do just fine in the long run.
Unfortunately, most people spend more money as they make more money. Rather than living below their means, people see a raise as a reason to buy a bigger house or a fancier car.
Set minimum monthly goals around your saving and investing. Raise those goals as you raise your income, and then spend what’s left…if you want.
Just because you have extra money sitting around doesn’t mean you are obligated to spend it.
“The stock market is designed to transfer money from the impatient to the patient.”
You won’t achieve your financial goals right away. Meaningful goals take years to pursue, and depending on your lifestyle and financial goals, the big ones can take decades to achieve.
The path to wealth requires patience, and the stock market is similar. It’s tempting to get discouraged and panic when stock prices take a tumble.
However, if you focus on the long-term picture and act accordingly, you’ll save more money and see your investments grow over time.
Patience combined with action is heavily rewarded.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
The people you associate with will play a big role in your financial growth. If you surround yourself with broke people, it won’t be long before you too are broke.
However, if you surround yourself with wealthy individuals, you have a greater chance of becoming wealthy in the future.
The moment you find someone who is better than you and supportive of your progress, cling onto that person. They are hard to find.
If you can’t find those types of people in your life yet, look towards social media. There are plenty of Facebook Groups and other online gatherings filled with people who can help you get to the next level with your finances.
“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.”
Time is your most valuable resource. The way you use it can set you up for riches or deplete your income.
On the path to saving money, you will say no to many things — potential purchases, time with acquaintances, and other things.
For some people, it’s difficult to say no. People are afraid of hurting each other’s feelings. However, when you say yes, you’re also saying no.
If you say yes to something, you say no to ever other scenario. I know an in-demand public speaker who had a brief stint of saying yes to every single speaking gig that came his way.
Yes, yes, yes, and more yes.
He got many speaking gigs with this approach, but then he hit a major roadblock.
One event organizer invited him to a paid speaking gig where he would have made $10,000. He wanted to say yes, but he couldn’t.
There was a scheduling conflict from an unpaid event he had said yes to beforehand.
Don’t rush to the yes because you don’t know what opportunities you’ll end up missing out on. Saying no often makes it easier for you to say yes to the things that matter.