1. He lives in the same home he bought back in 1958
While most billionaires bulk up on expensive real estate, Buffett originally paid US$31,500 for his Omaha, Neb., home — that’s about US$289,000 in today’s dollars — and he’s lived there for over 60 years.
His home is by no means tiny, however. The 6,570-sq.-ft., five-bedroom house has had plenty of renovations and additions over the decades and is worth about US$1 million today. It’s also protected by fences and security cameras and most likely has a good homeowners insurance policy as well.
Buffett has no plans to move out, calling the house “the third best investment I ever made,” in a 2010 letter to Berkshire Hathaway’s shareholders.
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2. He rarely takes out loans
Buffett’s one-and-only mortgage was on a vacation home in Laguna Beach, Calif., that he purchased in 1971, although he certainly had the cash to afford the US$150,000-listed seaside property.
He told CNBC that he took out the 30-year mortgage loan because “I thought I could probably do better with the money than have it be an all-equity purchase of the house.” He decided to use the extra cash on hand for shares in Berkshire Hathaway — the company that brought him billions.
Buffett's point about not locking up capital still resonates. And if you own your home, you have options to free up some of your capital by refinancing quickly at today's historically low rates before they rise this year, as forecasters expect. A switch may save you thousands of dollars a year.
3. He buys breakfast cheap
While Buffett could simply have a personal chef cook him a gourmet breakfast, he often grabs Mickey D’s on his way to work. He says he doesn’t like to spend more than $3.17 on his morning meal.
“When I’m not feeling quite so prosperous, I might go with the $2.61, which is two sausage patties, and then I put them together and pour myself a Coke,” he says in HBO's 2017 documentary Becoming Warren Buffett. He continues: “$3.17 is a bacon, egg and cheese biscuit, but the market’s down this morning, so I’ll pass up the $3.17 and go with the $2.95.”
Instead of going out for meals or buying a latte from Starbucks every day, make your own lunches and coffee. You can also get a little extra money by signing up for a cash-back app that gives you actual cash back, not points, on your purchases.
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4. He buys marked-down cars
Many billionaires and millionaires keep a collection of flashy sports cars and vintage models in their garages, but Buffett allegedly prefers fixed-up automobiles that he can acquire at reduced prices.
He upgraded from his 2006 Cadillac DTS to a Cadillac XTS for just US$45,000 in 2014. "The truth is, I only drive about 3,500 miles a year, so I will buy a new car very infrequently,” he told Forbes.
Whether you opt for a brand-new car or a slightly used model, emulate Buffett by spending within your limit. That means you won’t want to go for the first loan you spot and should look around for better deals. A good habit is to do a quick check of auto insurance rates every six months.
5. He doesn’t splurge on brands
Buffett doesn’t much care for designer suits or the latest iPhone model — he relied on his $20 flip-phone for years before swapping it out for the Apple smartphone in 2020.
Buffett avoids unnecessary spending and once said, “Do not save what is left after spending, but spend what is left after saving.”
Park your funds in a high-yield savings account or in a diversified investing portfolio so the money can grow over time. Set aside your extra cash for an emergency fund or retirement instead of blowing it all on nonessential purchases.
6. He doesn’t invest with borrowed money (anymore)
“I’ve never borrowed a significant amount of money in my life. Never. Never will. I’ve got no interest in it,” he told students at Notre Dame in 1991.
Although a young Buffett once borrowed 25% of his net wealth to buy shares, he warns investors against repeating the same mistake.
Even skilled stock traders will tell you borrowing to invest can be risky. And there’s no real need with investing apps that allow you to start with a small amount of money, like one that lets you invest using nothing more than your spare change.
7. He does what he loves
Buffett credits some of his success to his passion for investing. “You have to love something to do well at it,” he says, urging people to take the jobs they love, instead of positions that look good on your resume.
Even if you can’t quit your full-time job to focus on the things you truly enjoy, you can certainly find the time for some affordable hobbies. Buffett himself enjoys card games and playing the ukulele.
And if you’re looking for a way to boost your income, capitalize on your skills and hobbies, try setting up a side hustle, such as being a mystery shopper.
8. He finds creative ways to save
When Buffett’s first child was born, he converted a dresser drawer into a bassinet. For his second, he borrowed a crib.
“If you buy things you don’t need, you will soon sell things you need,” the billionaire says.
Take a good, hard look at your finances and figure out what you can cut down on. Get yourself a library card and borrow books and movies instead of purchasing them. Read a few thoughtful advice columns on saving money.
9. He uses cash, not credit
While most of us prefer the convenience of a credit card for our everyday purchases, Buffett uses hard cash.
He told Yahoo Finance Editor-in-Chief Andy Serwer in 2019 that he uses cash “98% of the time. If I’m in a restaurant, I’ll always pay cash. It’s just easier.” While the method may sound a bit old school, relying less on your credit card can help prevent spending money you don’t have.
Using most of your available credit and falling behind on your monthly payments damages your credit score. If you’re struggling to pay off your credit card debt, you might want to consider bundling it up into a debt consolidation loan with a lower interest rate.
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