10 things poor people waste money on

Warren Buffett, one of the world’s most successful investors, is known for his simple financial wisdom. It’s definitely worth listening to his advice, especially if it helps you avoid financial mistakes.

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According to Buffett, here are ten things poor people waste their money on and what he does instead.

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Low value investments

“The most important investment you can make is in yourself,” Buffett said, according to Inc. “That’s how knowledge builds. Like compound interest.”

One of Buffett’s most famous tips, called the Buffett Formula, is to go to bed smarter every day.

According to Inc., Buffett recommends reading it. He spends about 80% of his day reading and recommends that anyone who wants to be successful should read 500 pages a day.

If you’re currently investing in something other than yourself, it might be time to rethink your strategy.

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Credit card debt

Buffett is also a big opponent of credit card debt. He prefers to use cash rather than a credit card. “I have an American Express card that I got in 1964,” Buffett told Yahoo Finance. But I pay cash 98% of the time.”

Quantity over quality

“It is far better to buy a wonderful company at a fair price than to buy a fair company at a wonderful price,” Buffett wrote in his 1989 letter to Berkshire Hathaway shareholders.

Buffett won’t invest in something just because it’s cheap. Although he is talking about investing in companies, this can be applied to everyday life. If you prioritize quantity over quality, the short-term gains might not mean much in the long run (and it might cost you more).

Unnecessary expenses

Buffett doesn’t care if he has the latest technology or designer labels. He used a $20 flip phone for several years before switching to an iPhone in 2020, according to AP Moneywise.

His advice? “Don’t save what’s left after spending, spend what’s left after saving,” says Moneywise.

New cars

Cars lose value. According to Kelley Blue Book, most new vehicles lose 20% of their value in the first year.

So instead of buying a new car, Buffett prefers to buy used cars at reduced prices.

“The truth is, I only drive about 3,500 miles a year, so I will very rarely buy a new car,” he said, according to Forbes.

Full price purchases

Even Warren Buffett looks for good deals. Years ago, Buffett once invited Bill Gates to a meal at a fast food restaurant and used vouchers to pay for the meal.

The story continues

“Do you remember the laugh we had when we traveled to Hong Kong together and decided to have lunch at McDonald’s? “You offered to pay, reached into your pocket and pulled out… vouchers!” Gates wrote in his and his now ex-wife Melinda’s 2017 annual letter.

“Melinda just found this photo of me and the ‘major donor.’ It reminded us how much value you place on good business,” Gates wrote, using the anecdote to launch a discussion about the value of philanthropy.

Regular evenings

Buffett has a very simple diet and doesn’t like to go out. In Buffett’s biography, “The Snowball: Warren Buffett and the Business of Life,” author Alice Schroeder quoted him as saying, “I like to eat the same thing over and over again. I could eat a ham sandwich for breakfast every day for fifty days in a row.” , Mashed reported.

Wasted opportunities

In his early years, Buffett took up side hustles and made money by delivering newspapers, selling used golf balls and polishing cars, GOBankingRates previously reported. He also looked for new opportunities, and when he couldn’t find any, he created them.

Gambling

According to The Motley Fool, at a Berkshire Hathaway shareholder meeting in 2007, Buffett called gambling “socially repugnant.”

“I’m not a prude, but gambling is, in a sense, a tax on ignorance,” he reportedly said, referring to the tax revenue generated by gambling.

“A government should not make it easy for people to collect their Social Security checks [waste them pulling] a handle.”

If you have extra money, don’t waste it on gambling.

Live beyond your means

When you see something you like while shopping, ask yourself if you really need it or just want it.

During a meeting at Emory University in 2009, Buffett said his goal was “not to make people jealous.” He also said you can’t buy health or love and warned the audience not to confuse the cost of living with the standard of living, according to meeting notes from a participating student that appeared on the student’s Underground Value blog.

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This article originally appeared on GOBankingRates.com: Warren Buffett: 10 Things Poor People Waste Money On