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Have you been in a conference room full of seemingly ambitious and aggressive men and women? They tell big, alluring stories about business, risk taking, saving money, pooling resources and suddenly you hear later that they pulled out very broke.

Almost everyone would like to swim in the riches and live a luxurious life, but not everyone knows what it takes to reach this level.

It should also be noted that different companies or countries pursue different forms of economics, which will dictate the manner, style and paths of financial success.

Based on the advice of billionaire Warren Buffett, CEO and chairman of investment firm Berkshire Hathaway, there are certain rules that must be followed in order to become a millionaire.

Pay your savings first

As Buffett has noted and demonstrated over and over, 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 to retire 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 portion of their funds to indulge in luxury and high-risk investments. They simply practiced and taught financial discipline consistently and early.

For example, the teenage girl of a friend of mine works part-time not for the chance to indulge in cinematic or designer fashion dates, but to create her own pension 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 a child.

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.

Beware of brand follies

In the example of Buffett, consider buying your cars (luxury or not) 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 a family vacation or a vacation 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, quickly reminds her 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 flippant 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 adjusted 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 is a useful 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?

Watch out for 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 example, 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).

Be even more careful when investing with borrowed money

For the record, Buffett cautioned against borrowing money to invest in securities on several occasions. 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 a 2012 MSNBC interview. Gorel noted on air Buffett’s oft-expressed opinion on the wisdom of buying or refinancing homes on $ 30 fixed-rate mortgages. years that are canonical in the United States, but not so easily. 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 beneficial over time. By allowing your rent the tenant payers help pay off 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.”

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