Want to become a millionaire? Follow the 4 rules of Warren Buffett.

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How many entrepreneurs are as confident now as they were before the start of the Covid-19 pandemic? Yes, we know the majority of the S&P 500 are companies that started out in bear markets. And yes, the best entrepreneurs intuitively take advantage of tough times to reach out and listen even harder to their market and their customers, innovating where it’s needed and making their businesses more resilient than ever.

But for many of us the current climate is different. The outings that many or even most were targeting are now either delayed or totally different. Consumers are different in ways we could not have predicted. Employees are different and even the basic forms of employment have changed.

Given this, is it still possible to acquire sufficient financial security to retire? From my perspective, it absolutely is, but most likely by different methods than you might expect. I believe we can build a map of what we need to do now in four words: think like Warren Buffett.

Related: Warren Buffett’s top 3 tips for entrepreneurs

That’s it. But when I say that, know that I define a type and not necessarily praising the anybody. Listen carefully to the rules Buffet has set through a variety of mediums (spoiler alert: the fourth rule was given to financial advisor Adiel Gorel, who created and hosted the PBS specials. Wealth Retirement Remote and Life 2.0, in the form of a personal note). These rules have been consistent for decades, but are even more important during our current economic woes of politics and the pandemic.

1. Pay your savings first

As Buffett has noted and demonstrated repeatedly, you need to “pay yourself first” by putting some of your funds aside first.

Too many entrepreneurs bet on the business they create and live for the promise of “the big exit”. But then it turns out badly. Worse yet, some founders have done this multiple times. An expert and friend who owned 29 businesses before the pandemic made a funny statement: “You can always tell entrepreneurs in a room. They have the greatest stories. And then, almost inevitably, they die broke.

Statistically, the most financially secure people are the ones you wouldn’t expect. These are ordinary people who have practiced financial discipline. They didn’t wait to save and invest until “we can afford it” (which we never would) or “when we leave our business”.

With or without advisors, they calculated what they would need for retirement and learned to save first (sometimes on a hard-to-access CD or at a separate bank). Then they covered their needs. They used the smaller part of their funds to indulge in luxury and high risk investments. They simply practiced and taught financial discipline consistently and early. For example, a friend of mine’s teenage girl works part-time not for the chance to indulge in cinematic or signature fashion dates, but to set up her own retirement fund.

In a similar vein, I learned that an entrepreneur I have known from childhood was homeless for a long period of adolescence. He held several part-time jobs as a high school student and senior while first living in his car and then later acquiring a trailer. He was even very hungry at times, but since he was paid, the first thing he bought (after braces) were gold coins, reminiscent of the principles he had learned from his great-grandfather when he was small. Today, in his early sixties, he has been retired for 14 years. He started, owned and left several companies, but continued to save and invest in gold, stocks, real estate and other assets throughout.

2. Watch out for brand splurge

In Buffett’s example, consider buying your cars (luxury or not) that are lightly used.

If you are buying a luxury home, choose a home and location that could allow it to easily resell or serve as a permanent or part-time rental for additional income and tax benefits. Or consider owning and living in a conservative home and occasionally renting a luxury home yourself every now and then for family vacations or vacations with friends.

A wise advisor I know advises that you only allocate 20% of your income or investment income to the “three” f’s “: food, fashion and fun. However, my own business partner, Lauren Solomon, a professional image consultant, doesn’t hesitate to remind clients that working remotely or living on a conservative income is never a justification for ignoring “the business of being.” you “. You shouldn’t become so laid back and lax that the way you present yourself contradicts the standard of quality you stand for. Even casual clothes can be used to create an aesthetically appropriate result. As she often points out, “You can’t ask other people for money if you present yourself as if you’ve never had money yourself.

Here’s a helpful way to think about luxury brands. When you indulge, think of buying as a form of investment. Are the quality and style timeless and classic? Is this something that you could adapt and continue to wear in two decades or more?

Related: Warren Buffett tried to kill the ‘tapeworm’ in health care costs

3. Be careful when taking out loans

“If you buy things that you don’t need, you will soon be selling things that you need,” Buffett has said repeatedly. Credit cards can be the biggest potential waste of earnings and savings. If you follow Buffett’s lead, you work almost entirely in cash. If you use cards, learn about systems that allow you to optimize your usage to keep your credit score high and stay eligible for maximum credit when needed while paying the minimum amount of interest (or none).

4. Be even more careful when investing with borrowed money.

For the record, Buffett warned against borrowing money to invest in securities Many times. One possible exception to credit avoidance, however, is an interesting detail Buffett handed over to investment advisor Adiel Gorel in the form of a personal note.

Gorel recounts hearing Buffett following an MSNBC interview in 2012. Gorel noted on Buffett opinion often expressed on the wisdom of buying or refinancing homes on 30 year fixed rate mortgages which are canonical in the United States, but not as readily available in most other countries.

A fixed-rate loan on a single-family home (as opposed to multi-tenant housing of any kind) has the advantage of allowing inflation to make your loan payment and balance increasingly advantageous over time while allowing Also the rent of your tenant payers contribute towards the repayment of the loan principle each month.

On air, Gorel applauded Buffett for recognizing single-family homes as an attractive investment, saying he (and Berkshire) would buy a lot if they had the mechanism to do so. Subsequently, he learned that Buffett was watching. So he started a correspondence, offering the help of his company to facilitate the mass purchase. Buffett responded with a note that said, in part, “for this to be justified for Berkshire, we would need to invest around $ 10 billion …”

To be clear, no mass Berkshire home purchase has ever been made. But as Gorel notes, an ordinary investor well below the level of a Berkshire or Buffett can gain a huge advantage by owning even one or two investment houses with a 30-year fixed-rate mortgage, especially when ‘it is possible to do this at current interest rates below 4%. It could be a smart use of debt that propels you towards your retirement goals.

Of course, there are additional rules for saving and investing. But for now, I would advise everyone I know to take advice from classic experts like “the Oracle of Omaha” seriously.

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