Maybe we’d all have better lives over all if we still lived as hunter-gatherers. That’s the life we’re actually still wired for and was our lifestyle for most of our history.
But here we are now, trying to flourish in a complex, technical civilization where money is probably the most important tool we have.
You don’t need lots of money. But you do need enough, and be able to deal with it.
Warren Buffett’s advice is always clear and easy to follow. And his track record is pretty good.
But most people don’t follow his advice. Instead, they try to beat the market, keep up with the Jones, take on debt for stuff that decreases in value, concern themselves only with price, and on and on. Meanwhile Buffett just chugs along, getting richer following just a few guidelines.
Here’re some of his advice I extracted from an article on Lifehacker. I think his advice is straightforward enough that it doesn’t require much explanation or elaboration, if you want some it’s in the article.
I used some contractions and changed his advice to the second person, you. Here’s some advice from Buffett:
Don’t save what’s left after spending; spend what is left after saving.
The chains of habit are too light to be felt until they’re too heavy to be broken.
Should you find yourself in a chronically leaking boat, the energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
Price is what you pay; value is what you get. Whether it’s socks or stocks, buy quality merchandise when it’s marked down. You’ll be better off buying a wonderful company at a fair price than a fair company at a wonderful price.
Buffett’s investing strategy is “set it and forget it.” If you aren’t willing to own a stock for ten years, don’t even think about. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so will the portfolio’s market value.
If you’d invested in a very low cost index fund and didn’t put the money in all at one time, but gradually over 10 years—you’d do better than 90% of people who started investing at the same time. His money, is where his mouth is: Here’s what’s in his will for his wife: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (he suggests Vanguard’s VFINX).
He’s seen more people fail because of liquor and leverage—leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing
Some material things make life more enjoyable, many, however, don’t. Buffett likes having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset he most values, aside from health, is interesting, diverse, and long-standing friends.