Many equate property with wealth, and during the boom time, many entered the real estate game because it was viewed as a sure fire way to make money, and many people did. But sadly the title of this post does not relate directly to how I think. No, I am not part of the rich people I speak of! In fact, I am referring to the thoughts of Warren Buffet.
Multi millionaire Buffet has a few principals on wealth, so I thought it may be fitting to share some of the insights into his mindset that recently crossed my desk. His take on the current economy is that it's it akin to an illness, he actually refers to it as a financial illness that has infected all of us and has diluted our happiness. Very deep for this early in the morning, but I shall continue!
He goes on to say that basically everyone is desperately seeking a remedy to cure their financial illnesses and recover their financial health, and although I'd never thought of it in quite those terms, it is a pretty apt description of what is currently taking place. People are expecting those we deem to be financial experts to provide us all with the remedies, having quickly forgotten that it is those same experts who actually got us all into this financial mess in the first place.
Warren claims that every year he adopts a couple of old maxims as beacons to guide his future, in order to ensure he grows wiser and not older. This wisdom applies also to his financial state, and the financial wisdoms of our elders of which he speaks are below:
Hard work: All hard work brings profit; but mere talk leads only to poverty.
Laziness: A sleeping lobster is carried away by the water current.
Earnings: never depend on a single source of income.
Spending: If you buy things you don't need, you'll soon sell things you need.
Savings: Don't save what is left after spending; spend what is left after saving.
Accounting: It's no use carrying an umbrella, if your shoes are leaking.
Auditing: Beware of little expenses; a small leak can sink a large ship.
Risk-taking: Never test the depth of the river with both feet.
Investment: Don't put all your eggs in one basket.
Reading through these, they do not appear to be particularly onerous and like Mr Buffet, I am pretty sure that those who have already been practicing these principles have probably remained relatively financially healthy. In the same vein, it's highly likely that people who resolve to start practicing the above principles will more quickly regain their financial health than those who don't.
Really, I think most of us would probably like to be a little more like Warren, so in order to do that, it's possibly not a bad idea to become wiser and lead a happy, healthy, and prosperous life – and you can take that in the financial sense or not.