You might think it sounds ridiculous to take advice on what may be a meager personal finance landscape from people who are billionaires. However, the Rules of Thumb blog from MoneyThumb begs to differ. We think there is no one better to take advice from on your personal finances than those who have made it big financially. Do you think billionaires got that way by being flamboyant or careless with their money? No. In fact, the following 6 important tips on personal finance from billionaires include very practical advice and frugal habits:
Start Early
Carlos Slim Helú as noted in Wikipedia is a Mexican businessman who was ranked as the richest person in the world for a few years. Slim's personal finance tips reflect commonly held wisdom among wealth-building experts, including this very basic tip: start early. The sooner you start managing, saving, and investing your money, however, limited, the better off you'll be as long as you avoid mistakes like throwing all your investment money into one stock. Slim lived this advice, buying shares in a Mexican bank at age 12, and earning 200 pesos a week at as a teen working for his father's company.
Find Your Passion
Your bank account may be empty, but believing in yourself at the most fundamental level costs nothing. As billionaire Oprah Winfrey said, in an article at US News/Money, "You become what you believe. You are where you are today in your life based on everything you have believed." Change is possible whatever your situation and the first step is believing in yourself.
Christopher Paul Gardner is "only" a millionaire, but he was a homeless single father for a time. Carmine Gallo from Forbes had the opportunity to ask Gardner his secret to success, and Gardner said, in the Forbes interview, "Carmine, here's the secret to success: find something you love to do so much, you can't wait for the sun to rise to do it all over again." Maybe you can't start that design business, but you can go online or go to your library and start learning about it, and the sooner you do so, the better.
You Don't Have to Game the System
Billionaire Warren Buffett lives in Omaha, and he made his investment fortune on the fundamentals as shown in a Yahoo.com article from that link. Focusing on companies with strong annual cash flow, and choosing companies that aren't at risk of technical obsolescence. Buffett spent the early part of his career investing in insurance companies. It's not sexy, but it obviously worked. Whether you have $50 to invest or $5,000, sticking with the fundamentals is smart.
Simplify Your Life
This personal finance tip is similar to the previous one. Warren Buffett lives in a house he bought in 1957 for $31,500. Carlos Slim has lived in the same house for more than 40 years. Constantly pursuing things you don't need puts you on a financial treadmill, not an upward escalator.
Walking and Taking Public Transport Is Nothing to Be Ashamed Of
John Caudwell, David Cheriton, and Chuck Feeney are billionaires you probably haven't heard of, but all three as Investopedia notes walk, ride bikes or use public transport for everyday getting around. It's easy on the bank account, and better for the environment. If these guys aren't ashamed at taking the bus, you shouldn't be either. Haters are gonna hate. Ignore them.
Cars Are Consumer Goods
Ingvar Kamprad of Ikea drives a 10-year-old Volvo, and Walmart billionaire Jim Walton drives a 15-year-old pickup truck. Don't waste time on the idea that a car is a status symbol. Sure, if you're a car aficionado, there's nothing wrong with restoring or buying that sweet ride you've dreamed about, if you can afford to. But for most people, including rich people, getting from Point A to Point B in safety and reasonable comfort is sufficient. Some personal finance tips are about distinguishing needs from wants.
As you can see, it is not ridiculous to take personal finance advice from billionaires, it is actually smart thinking because so many very wealthy people started from very humble backgrounds. Whatever your financial situation, you can improve it, and personal finance tips offered by the very wealthy can make sense in just about any situation.
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