4 Precious Tips To Help You Get Better With Money From Warren Buffet.

1. Earning.

“Never depend on a single income. Invest to create a second source.”

Here’s what you need to know about passive income:-You don’t need to start a youtube channel or a blog to start earning. You don’t need to work part-time in a cafe to have 2nd source of income. You don’t need to do all this to have a decent income source.

There are traditional ways like blogging, vlogging, dropshipping, starting an online business, etc as passive income sources. Although they are pretty good sources, most of us are not skilled enough to do this. There are other ways like- investing in index funds, selling stock photos, data entry, etc. These sources don’t need a lot of skills. Here everything depends on what you love to do.

You don’t need to earn a lot from this source. Just learn and have fun. I would advise you to do some research before starting anything. You have time to properly establish this second source. Keep in mind you won’t start earning for the day- 1. Be consistent and have patience. This additional income source would bring some sense of security. You won’t be afraid of unemployment and would always have some extra money with you.

2. Spending.

“If you buy things you do not need, soon you have to sell things you need.”

Many go wrong in this one. It’s a skill. I’m not even joking. You might have seen people who have a habit of excessive spending.

SALE!! DISCOUNT!!! FREE!!! These words can have magic on them. And that’s ok sometimes. What you need to keep in mind is, before you spend money on your want, pay off all your needs. Pay off all your bills and necessities. This might seem obvious, but trust me, it’s better said than done.

Here are a few methods to stop impulsive buying- Stick to Cash instead of a credit card, know your spending triggers, plan short-term goals, etc. Discipline is the key.

3. Saving.

“Don’t save what is left after spending but spend what is left after saving.”

This is something most people neglect. In hard times, this money is what saves you from big debts. Saving can be hard for people having minimal wages but being consistent with your savings can help.

Ideally, you should at least have savings that will cover 2–3 months of expenses. With that life and health insurance are a must. Nowadays, I see many youngsters investing in retirement schemes, which honestly is a good move.

Here’s a trick I use for saving money- rounding up the sum of purchases. For example:- If your total purchase is $50.60, you can round up it to $51 or $55, and keep the remaining money as savings. This trick will help you save money without forcing yourself to do so.

This trick is also mentioned in the book Kakeibo: The Japanese Art of Saving Money- by Fumiko Chiba. Kakeibo is an ancient Japanese method of saving money. You can check out youtube videos on this concept.

Once you have some money in your savings account, you can move to step no.4.

4. Investment.

“Don’t put your all eggs in a single basket.”

ATTENTION PLEASE!!! Only start investing once you have completed all the steps mentioned above. Do not invest money you are not comfortable losing. Here we are going to see various investment methods and concepts. Please note, I’m going to discuss methods for long-term investment, so please bear with it.

Let’s start with the stock market. This one is a pretty familiar concept. Investing in individual stock or company and getting the profit the company gives in percentage. This method doesn’t suit everyone, as it has a high risk of losing money. So for the people who need some variety in their investment can choose mutual funds. A mutual fund can be great for people who are just getting started in investment. If you want even more security and diversity you can choose Index funds like S&P 500 Index fund, EFT Funds, which give variety in a single investment. For Indians, Motilal Oswal S&P 500, Nifty 100 are similar options to American ones.

(Please note, I’m not a financial adviser but merely just a random person on the internet. Please do your own research.)

You can also invest in gold, as it has seen rapid growth in the past few decades. Dividend stock funds getting popular lately for their good profits. If you want some fun investment options and wouldn’t mind taking high risk, crypto can be a good choice. Although crypto is very violent and unpredictable, it can give you high returns if played wisely. Just be patient.

Outro.

“Never test the depth of the river with both feet.”

Don’t think you will complete all the steps mentioned above in a single go. You need a lot of time and effort. I’m in no way saying this is the perfect method or the only way to get rich. These are just my thoughts. For students reading this, the best investment for you now is in learning a skill or educating yourself.

Hope this article was helpful and taught you something new. Comment below if you like to add something. Educational discussions are always welcomed. Thank you.