4 Lessons From Warren Buffet That Will Help You To Build Incredible Wealth
I used to suck at managing money. Whenever I received a deposit in my checking account, I’d head to the mall and spend all of it in one day. More often than not, I ended up in overdraft as a direct consequence of spending more money than I actually had. It sucked.
For a long time, that was how my life went. My lack of money brought my social life to its knees. It created various problems surrounding my mental health, due to an inability to pay for basic necessities. And within a few months, I found it extremely difficult to look at myself in the mirror.
But then, everything changed. I didn’t want to feel sorry for myself anymore. And I had a desire to change my life for the better. So I started studying successful people, like Warren Buffet, to understand their habits and mindset.
Which is why I’m going to share several lessons from Warren Buffet that completely changed the way I think about money. Hopefully, they’ll do the same for you, too.
1. If You Have Money Problems, Don’t Make Them Worse.
“The most important thing to do if you find yourself in a hole is to stop digging.” — Warren Buffet
I learned this the hard way. I often found myself unable to afford basic things, such as groceries and rent. Yet, I still continued implementing bad financial habits. Why? The truth is that I didn’t know any better.
But like Warren says, when you find yourself in a hole, stop making it deeper. Identify the actions that you can implement to improve your circumstances and change your financial situation for the better.
For example, you might need to stop buying expensive clothing at the mall to have a bigger budget each month. Alternatively, you may choose to go out to bars and clubs less frequently, so you can spend your money on things that are genuinely essential.
You get the idea. Take a long, hard look at where you are. Figure out where you want to be. Then, identify the necessary actions & habits that will help you make progress towards a better financial future.
2. Learning How To Say No Is A Superpower.
“The difference between successful people and really successful people is that really successful people say no to almost everything.” — Warren Buffet
I’m empathetic to the fact that this may be difficult for you to do. After all, it’s a pretty radical mindset shift to make. However, the effect it’ll have on your finances is truly profound.
Think about it. Do you really need to spend a few hundred dollars at a restaurant? Do you genuinely need to buy the latest phone, laptop, or anything else? Do you actually need to go shopping with friends at the mall every weekend?
Chances are, the answer is no. But you do them anyway. But don’t worry: this is an opportunity to change your life for the better. Because when you stop buying things that don’t really matter, you can focus your money solely on the things that do.
Last year, I was spending money on pretty stupid things. For example, I thought it would be a brilliant idea to go on vacation with a friend when I had barely any money in my checking account. For the entire time, I was worried about running out of money, so I couldn’t enjoy myself. That sucked.
Don’t be like my former self. Learn how to say no. Sure, it may be uncomfortable. However, people will respect your ability to think for yourself and prioritize the things that matter to you. And of course, your bank balance will certainly benefit as a result.
3. Spend Time With People That Inspire You.
“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.” — Warren Buffet
This doesn’t just apply to personal finance. In fact, it applies to pretty much every single aspect of your life. Spend time with people that inspire you. Hang out with people that encourage you to become your best self.
There’s a cliche that we’re the average of the five people we spend the most time with. It’s true. When you hang out with pessimistic people, you’re naturally going to adopt a similar mindset. In contrast, hanging out with optimistic people will change your life for the better.
Find a group of people that you admire. Allow them to influence your personality so you can become the type of person you want to be. For example, I frequently watch interviews with Elon Musk and Warren Buffet to gain a better understanding of their mindset.
Each day, improve your mindset by 1%. Because when you make a little bit of progress each day, the power of compound interest will create an entirely different life over time.
4. Have Faith In Your Ability To Succeed.
“I always knew I was going to be rich. I don’t think I ever doubted it for a minute. ” — Warren Buffet
Sure, your circumstances may not be great right now. But to change your life, you first need to change your way of thinking.
Have faith in yourself. Have confidence in your ability to succeed. My friend, you’re perfectly capable of creating an incredible life. All you need to do is implement the necessary actions to make it a reality.
I used to think that it was impossible to change my circumstances. I genuinely thought that I’d be stuck in an endless cycle of financial hardship for the rest of my life. But one day, I started implementing actions that would give me confidence in my ability to create a better future.
For example, I created a budget to understand how much money I was spending each month. Then, I figured out ways to reduce my expenses, so I could afford food, rent, and several other important things.
Suddenly, I had more money in my checking account than ever before. The reason? Taking practical steps to improve my future helped me gain a sense of confidence in my ability to succeed.
You can do the same. Figure out what actions you can take right now to improve your finances. Make a budget, get rid of unnecessary expenses, and figure out ways to increase your monthly income.
None of this advice is extremely complicated. But once you implement it, your financial situation will quickly improve as a result.
Don’t judge yourself based on who you used to be or who you are right now. You can’t change your past. However, you can certainly improve your future.
Stop digging yourself a hole. Say no to things that aren’t important. Hang out with people that inspire you, so you can improve your mindset. And most importantly, have a bit of faith in yourself.
If you can do all of that, your life will quickly improve in ways you never imagined. So what are you waiting for?