Becoming rich is the dream of many. But, do you know the ways to execute this dream? It is not easy as it sounds. Millionaire Warren Buffett has four golden rules for becoming rich.
Here are those four rules by the Oracle of Ohama.
Have Savings:
This is his first golden rule. He always suggests putting aside money for oneself. In his opinion, everyone, especially entrepreneurs, should practice financial discipline for survival. Do not cling to the promise of “the big exit’ of the company, and living good thereafter. Invest in gold, stock, real estate or other assets.
Do not splurge:
Do not make luxury a daily habit, says Mr Buffett. In his opinion, if you spend money on luxury, make sure that you get the maximum benefit out of it. For example, instead of buying a luxury home, you might consider the idea of living in a conservative home and renting a luxury home from time to time for a vacation. Still, if your mind is stuck on purchasing a luxury good, make sure it is a good investment.
Be careful of loans:
“If you buy things you don’t need, you will soon sell things you need,”
says Buffett.
He does not believe in credit cards as he considers them as the highest potential waste of earnings and savings. He operates nearly entirely in cash. Even if you use cards, Buffett says, learn the ways to keep your credit score high and stay eligible for maximum credit when needed while paying the minimum amount of interest. Even if you borrow money, he says, to invest it carefully.
