I was reading few financial blogs online last week about the world’s known billionaires. It discussed what their latest financial net worth and some of the things they did to reach their apex and what they did to help out people. How people can become a Billionaire or a Millionaire.
It also discussed how one of them gave away most of his wealth retaining only 250 million for his own expenses. Whoa! That’s still a lot of money in my opinion! I could live a financially independent life on half of 1% of that for the rest of my life! I would have closed my loans which is now around 30 Lakhs INR and would have started a business to pursue my dreams. One thing I understood is all those Billionaires has a good financial planning. Yes, today I am going to talk about the Money Management by a Billionaire.
Well, the other day I started watching the videos of Warren Buffett’s speech to a Financial Education Forum in Omaha. Warren Buffett is considered as the best investor of the 20th century. Yes, he is a billionaire many times over and is probably the most respected and admired billionaire in the elite group of known billionaires. When he speaks, a whole bunch of people listen because almost all of his investments got profitable, he maintains a simple life, lives in the same neighborhood and drives an 8-year-old car.
I still remember the words “Don’t put all the eggs in one basket” – Yes, this applies to your investments too. Here’s some of the sage financial advice he told the young students:
He said two things can hold you back:
1.) Lack of education & 2.) Habits that you develop
He said it’s very important to start creating good habits that will lead to success while you are still young. When you’re 50 to 60 years old, it will be hard to develop them because your habits are set. But, if we are in mid’s I think still there is an opportunity for us to develop it. Let’s practice and give them a try.
Pick out the person that you admire most. Write down the character traits that make you admire him or her. Then work on acquiring those habits for yourself.
Think about the person that is repulsive to you. What bad attributes does that person have? Do not develop those habits. Take the good habits from top people, do not enact them. Enacting those habits doesn’t make you one – you think, you should be.
Choose to have integrity. He mentioned that when his company hires new employees, he looks for three attributes: Integrity, Intelligence and Energy. He said that all of the students have intelligence and energy, but they still have to choose whether to have integrity or not. Yes, that’s right. I would suggest, if you are hiring a person for you company or your team, ensure the person whom you hire is honest and has the attitude to learn. In reality, Skills can be developed, but not the other factors like Integrity and Attitude.
One very significant piece of advice he mentioned is to avoid credit cards. If you start a revolving debt on a credit card, you will pay 18 -20% interest. You can’t make a lot out of your life if you are constantly paying 18 to 20 percent interest. You can make a lot of money by lending at 18-20% but you won’t want to be on the other side: the one paying the interest. You must know, this is very right. Still I am in the debt of credit cards. Unable to pay those, as the salary I get goes towards loans and other expenses which are necessary.
If you can’t pay for it, DON’T buy it. Put yourself in a position where you pay CASH for it. I am trying very hard to follow this.
I think the above advice about credit cards is something that needs to be learned by a lot of young and old people (who haven’t figured out yet how to manage money properly). It needs to be taken to heart and practiced daily.
Here is the video “How to Stay Out of Debt – Warren Buffet”
I have included my personal opinion along with what Warren Buffet has said. People who is reading this blog, especially who is in my situation, let practice few things what he said. I am sure this will help us in betterment. Now have fun watching the videos of billionaires! I hope his advice will help you develop good habits for your future success! And you will now know “How to Become a Billionaire”.