Usually, if someone says Warren Buffet in a sentence, it creates a little bit more attention from the people around them. Most general advice is that if Warren Buffet says to do something, you do it. If he says don’t do something, you probably shouldn’t do it.

I’d like to think people listen to what I say, similarly. Of course, I often cannot get my own wife to listen to me, so I might have a ways to go before my hopes come to fruition there. Though, truth be told, I have no idea if Warren’s wife listens to him. It is not in any notes or comments I have read from or about him. Maybe she calls him a butt-face just like my wife calls me. It is a relationship after all. Relationships be tricky.

Any-who. For this post, let’s just take some of the collective wisdom Mr. Buffet has given to the world (maybe not to his wife) and condense it down into some actionable steps.

We will call this “A collective condensing of a few of the thoughts of Uncle Warren”. He seems like a uncle figure, right? Someone we secretly listen to instead of our parents?

So, let us begin:

1. Uncle Warren says – “The most valuable investment you can make is in yourself”. Now, you might be booing me for putting this as number one because it is corny as all get up, but this is Uncle Warren’s secret weapon. Mr. Buffet, during his lifetime, has poured a tremendous amount of knowledge into his mind. He has been quoted as saying he believes you should read 500 pages a DAY! And he stated, previously at least, that he sometimes spends 80% of his day reading. I need to note a few things here:
   • That is a crazy amount of reading. Think of how smart you would get and how quickly you would get their if you spent a consistent amount of time reading that many pages a day.
   • I can almost guarantee that the majority (or all) of that reading he is doing is non-fiction. It is unlikely to be the Twilight Saga that Uncle Warren is reading. So, if you do read quite a bit, but it is fiction stories that you read, you probably need to switch up at least the majority of the reading you do to something non-fiction. Some extra fiction fun thrown in is still cool.
   • I do not think watching the movie version of the books qualifies either. Just for a heads up. No shortcuts.
2. Uncle Warren Says – “It is far Better to buy a wonderful company at a fair price than a fair company at a wonderful price”. Or, pretty much, when you are investing, invest in companies or products that will last the test of time, even if you pay fair market value for them. Now, does that mean you shouldn’t be looking for great opportunities to purchase real estate at a price lower than the market, or to invest in the stock market shortly after a market drop? Of course not, make your money homie (also a quote by Warren Buffet, somewhere, I’m sure of it). But, over the course of time you should not be investing by trying to time the market, you should be investing by continuously acquiring companies or other assets that will consistently and safely increase in size and value. Too often people chase price, only to have those investments fall apart because the underlying company or asset wasn’t something that could stay strong and grow. For an extra quote to think about in this section, from Uncle Warren, think about this “The Stock Market is designed to transfer money from the Active to the Patient”.
3. Uncle Warren Says – “Do not save what is left after spending, but spend what is left after saving”. This guy, am I right? Wordsmith. And he hits it on the head. The majority of the human race, largely due to lack of proper financial education, has their spending go in order of necessities and fun, and then investments (if any money is left). This is a large contributor to the average savings rate in the United States constantly only being around 4% of the average persons income. In case you are wondering, yes that is very low and not good. Please, for the love of goodness, listen to your Uncle Warren and flip that around. You should save the percentage of your income you need to retire first, and then the rest of your money can be used for whatever. For more information on savings rates that can actually get you somewhere, see This Post on Savings Rates Vs Retirement Dates.
4. Uncle Warren Says – “The Noah Rule: Predicting rain doesn’t count, building arks does”. There are a good number of quotes we can go with surrounding this discussion point. Another famous quote of Unky Warren’s is “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No 1.”. One of the best things you can do as an investor and as a person, is to plan ahead for the worst. Eventually, the market will crash, a major expense will come in your life, you or a spouse will lose your job, or the economy will go into a recession or depression. If you simply go about your life and your investing practices as if everything will be hunky-dory, you are putting yourself and your family in a precarious position. And likely, you will have something come up that will cause you major financial hardship. Step number one with your finances should be to build your safety ark to protect you from the rising tide. That includes an emergency fund, life insurance, health insurance, disability insurance, and an understanding of ways to decrease your budget quickly, if you needed due to an unexpected event. Once those pieces are designed and set up correctly, you can safely move into a larger focus on storing animals two-by-two (which is my clever analogy for saving up assets. Get it? Get it?).
5. Uncle Warren Says – “The happiest people do not necessarily have the best things. They simply appreciate the things they have”. One of my largest beliefs is that people, on average, do not need to focus on becoming millionaires or multimillionaires in their personal finance journey. There is nothing wrong with becoming a millionaire or a multimillionaire, but no one who reaches those lofty heights all of a sudden becomes way happier because they have one million and one dollars to their name in comparison to nine hundred and ninety-nine thousand dollars to their name. When you become a millionaire, for instance, you don’t have worries stop, money problems go away, family problems stop and so on. Hitting that goal of one million dollars does not switch a happiness light bulb on in your brain. Everything in your life is exactly the same as it was before, you just have a different number in your net worth calculator. So, what you need to do is not focus on reaching a number, or a house, or a car, or a certain number of kids, or the American dream. You need to appreciate what you have now and use your financial growth to make it more likely you get to continue to enjoy your life, as it is, for longer with less likelihood of financial disruption. Be appreciative, not greedy.

Now, there are a lot more quotes from Uncle Warren that we could put in here (technically, too many), and I would encourage you to take his recommendation from number 1 above and go read his notes, biography, and everything you can about him. He is a good person to learn from, and you are a good person to have your brain grow with knowledge.

Enjoy this post and others, and have a lovely day.

Also, for something completely unrelated to this post, enjoy one of the “Best Science Images” of 2024 –