Warren Buffett: 12 Things People Waste Money On

Financial independence and financial education are crucial for achieving long-term financial success. One of the most successful investors of our time, Warren Buffett, has shared some insights on what people tend to waste their money on.

Let's explore 12 things he's identified and how you can avoid them.

1. Earnings Power – Invest in your skills, education, and ability to earn a good income. "Investing in yourself is the best thing you can do. Anything that improves your talents; nobody can tax it or take it away from you." – Warren Buffett
2. Credit Card Debt – Credit cards offer many benefits, including cash back, points, and airline miles. However, these benefits only make sense if you pay the full payment every month. If you carry a credit card balance, the interest rate can be as high as 20%, meaning you'll pay an extra 20 cents on every dollar you owe. Avoid carrying credit card balances and ensure any loan you take is worth the interest you'll pay. "If you buy things you do not need, soon you will have to sell things you need." – Warren Buffett.
3. Bars and Pubs – Alcohol at bars and pubs can be expensive, costing up to $10 per beer bottle. Instead, consider hosting a house party to socialize with friends.
4. The Latest Technology – The newest and greatest technology may seem appealing, but there's often little difference between one phone and the latest. Gadgets like back massagers, fancy toothbrushes, and sound systems are cool but unnecessary. Warren Buffett still had a flip phone in 2008 that he was still learning to use and didn't have a computer in his office at work for decades.
5. Expensive Clothes – Billionaires like Mark Zuckerberg, Warren Buffett, and the late Steve Jobs practiced the art of simplicity in their wardrobes. They stick to basics making it a practice not to waste money on expensive clothes. Warren Buffett wears the same type of plain suits he has for his whole adult life.
6. New Cars – A brand-new car may look good but is never worth the price. Cars lose value as soon as you drive them off the lot, with a new vehicle typically losing 20-30% of its value in the first year alone. Don't borrow money to buy an asset that immediately depreciates. Warren Buffett keeps the same car for as long as his family will let him.
7. Gym Memberships – Many go unused after the first few months. A gym membership doesn't make sense if you're not committed to working out regularly. Consider free workout options like walking, running, or hiking. Warren Buffett hates wasting money as he sees its potential for long-term growth as investment capital.
8. Subscription Services – Subscription services can be tempting, but they charge your credit card automatically. Buffett believes it is more important to be an investor in businesses than a consumer in too many of their products.
9. Overusing Skincare Products – With so many skincare products available, it's tempting to overuse or combine them, which can worsen your skin. Find a natural and straightforward hair, face, and body care routine and stick to it.
10. Frequent Nights Out – Going out for drinks or movies with friends can add up quickly. Instead, consider cooking and eating at home, which can be far cheaper and healthier.
11. Gambling – Betting can be fun and addictive, but Buffett doesn't believe in making bets when the odds are against you. He loves the insurance business as he can put the odds in his favor and turn policyholders into cash-flowing assets.
12. Smoking -Cigarettes and cigars are expensive, costing around $2,400 annually. Quitting can save you a significant amount of money.

Conclusion

Warren Buffett's insights on what people waste their money on are important lifestyle tips for achieving financial success. By avoiding the common financial traps Buffett identified, such as credit card debt, excessive nights out, and other unnecessary expenses, you can save and invest more money for your future.

It all starts with the right mindset, self-control, and habits.

Your ability to earn an income is crucial to your financial success, and once you achieve it, be very thoughtful in how you spend it and save as much as possible.

Financial success is a cultivated set of habits based on your priorities.

Warren Buffett has given us these great examples, I don't know about you, but I can't think of a better financial role model - Can you?

As always, your thoughts, feedback, and input are welcomed!

I wish you all a very productive and prosperous rest of your week ahead!

Thank you for reading my blogs and for your continued support.

-Mike