7 financial advice from Warren Buffett

I hope you know Warren Buffett. If not, you will never win the respect of the financial sector, because there he was idolized. And not just that. Warren Buffett - one of the richest men in the world, who earned his fortune through investments. In his book, he gave a few tips that are simple enough and helpful. To say that they will help you make millions, we will not, simply because no one can make you millions, except yourself.

But these tips will help you understand the nature of money and know a person's thoughts, which, thanks to his intelligence became a billionaire. So, here they are.

Borrow money wisely

Buffett warns that you should avoid unnecessary loans. Credit cards, installment, mortgage - all this will lead to the fact that your payments will be on loans once exceed your expenses. And the road back will be gone.

I saw a lot of people that have failed due to alcohol. But at least I have seen and people who went bankrupt because of excessive traction to credit. If you're smart enough, you can make money without borrowing.

You pay yourself first

If you want to learn how to save money, use this rule:

Do not try to save money after you spend it. Delay them immediately.

Simple and trite, but it is effective. Suppose that you have sufficient income to cover basic needs, and you want to start saving money. Put the required amount of money to pay bills and needs, the amount set aside after that with which you want to start their savings. Everything else you can spend.

This rule will help you to finally pull myself together and start saving money. Once you start doing it, way back will be gone and you will become much easier to set aside the required amount each month.

Enough to underestimate their money habits

A long time ago I came across an amusing math. Imagine an ordinary girl working in the office. Every day she goes to lunch at a nearby coffee shop and buys there a latte and muffin. Suppose that it is spending 200 rubles. Now count. For a week it will spend 1000 rubles per month — 4000 rubles, and for the year — 48 000 rubles. Almost 50 thousand rubles, you can save, giving up a simple habit of drinking coffee and a roll at lunchtime. I'm not talking about the number of calories that it also will not eat.

If you want to change their habitsThe best way - just stop making them. Learn to understand your priorities and move in the right direction.

Price and value - it's not the same

Buffett — incredibly frugal and temperate man to their needs. His frugality is determined by the value of the goods. Here is what he says about it:

Long ago, Ben Graham told me that the price - this is what you pay and value - what you get. Whether we're talking about socks or about promotions, I like to buy when the price is as low as possible.

But being frugal does not mean buy everything on the cheap. But it also does not mean that you need to buy valuable things for a lot of money. In other words:

It is better to buy an incredible company at the regular price than the usual company at an incredible price.

If you want to be economical, next time pay attention not only on price. The value of the goods is also very important to you.

Investing is easier than you think

Here is a rule that is not so easy to find in books on investing:

If you invest in an index fund in small installments over 10 years, you'll be in a better situation than those who invest at the same time, but all at once.

According to Buffett, the investment - this is very just. Here are a few tips on where to begin investing:

1. Learn the basic investment terminology.
2. Open a brokerage account.
3. Select Index Fund (Buffett advises VFINX).
4. Buy a part of the fund.

It would be great if those who have experience in investing, share your opinion in the comments about how this information is useful to our country.

Long-term investments in priority

Buffett warns that burn on daily stock price jumps is easy. Therefore his choice - it is a long term investment.

If you do not plan to hold the stock for 10 years, do not try to buy them even at 10 minutes. Collect the portfolio companies, the cost of which has grown in recent years. And only on the basis of this portfolio make conclusions about the purchase of shares.

If you already bought the stock, Buffett advises not to look at their value every day. Take care of your nerves. Many well-known investors buy stocks and forget about them for a while. We are not billionaires, so forget about the money invested will be difficult, but also to spend their nerves on every minute update reports too stupid.

Money - that's not all

He's easy to talk. He's a billionaire.

In an interview Buffett said that he was pleased to travel in a private plane, but have a dozen homes - it is a burden. In addition, according to Buffett, in his life, there are two most valuable asset: their health and friends, with whom he had been friends for a long time. Money gives moreBut we should not forget that in life and without them many important things.