The Buffett method: this is his decalogue of tips to become a millionaire

Warren Buffett, considered one of the world’s most successful investors, will always be remembered as one of the benchmarks in finance. At 91 years old and with several books behind him, the CEO of Berkshire Hathaway offers several advice related to money: from how to make it, maintain it or grow over time.

  1. Invest for the long term

Be patient. This is a Warren Buffett rule of thumb. For this guru, “if someone is sitting in the shade today it is because someone else planted a tree a long time ago.” That is why the billionaire calls for investing thinking of “a horizon of several decades and fleeing from quick profits.” “Some things take time. You can’t produce a baby a month by getting 9 women pregnant.”

  1. Never invest in a business you don’t understand

A classic that is often related to the term FOMO (Fear of Missing Out, that is, fear of missing it). This fear of missing the train causes the investor to enter the markets at the wrong time because he sees the price rise and rise and, then, begins to chase it. In this sense, Buffet proclaims that every investor has to learn to manage money and have some knowledge about the chosen asset. That’s why much of his work focuses on limiting exposure and minimizing risks.

  1. Avoid getting into debt

For Buffett, loans can be seen as an addictive tool that ends up creating problems in the future. “I’ve seen so many people fail because of alcohol and borrow money … You don’t really need to borrow that much. If you’re smart, you’re going to make a lot of money without borrowing.”

  1. Invest in yourself

“Anything you do to improve your talent and become more valuable, you get it back tenfold,” arguing that “knowledge cannot be taxed or stolen. It is safe in every brain.”

  1. Take care of your lifestyle

It is quite common that the more money you have, the lifestyle increases exponentially. This is something that Buffett has rarely carried out, since despite amassing a great fortune, he has always been characterized by leading an austere life. For example, he lives in the same house he bought in 1958, spends no more than $ 3.17 on his breakfast, or buys discounted cars.

  1. Use cash

“Don’t leave home without cash,” confesses a Buffett who uses this method 98% of the time. Relying less on your credit card can help you avoid spending money you don’t have.

  1. Buy something expensive at a low price

Buy something expensive at a low price
In a letter to Berkshire Hathaway shareholders, Buffett advised them that money is lost by paying a price that does not match the value of something, so he told them that “the price is what you pay and the value is what you get. what do you get”. “Whether it’s socks or stocks, I like to buy quality merchandise when it’s on sale,” he revealed.

  1. Surround yourself with people who contribute

For Buffett, one of the keys that he often reiterates is to surround himself well. Of all that list of contacts, in which friends and co-workers stand out, the billionaire highlights the importance of marrying someone who inspires and transmits good energy. “You must associate with people who are the type of person you would like to be, because you will move in that direction.”

  1. Knowing how to invest in times of inflation

During a shareholders’ meeting, Buffett was asked which holdings in his company were best suited to prosper during a period of high inflation. His response was that the best business to own is one that “does not require continuous reinvestment because it becomes more and more expensive as the value of a dollar falls.” The best businesses during inflation are those that are bought once and then do not have to continue making capital investments afterwards, “he confessed.

  1. Stay the course

The desire to obtain early results can seriously affect the financial stability of investors. All made worse by the supreme volatility of most markets. In that sense, Buffett’s recommendation is to remain calm at all times. “Although markets are generally rational, they occasionally do crazy things.”