Warren Buffett's Simple Wealth-Building Strategy

Everyone knows Warren Buffett is ridiculously wealthy, but how he got so wealthy is less obvious. Yes, Buffett has made a fortune investing in stocks, but his simple and consistent process he uses is the main reason for his success.

In the following video, Motley Fool analysts Matt Koppenheffer and David Hanson discuss the lessons they learned from Warren Buffett while attending the annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska. During the meeting, Warren Buffett and his business partner, Charlie Munger, field questions from shareholders for nearly 6 hours and provide their thoughts on everything from investing, corporate governance, and personal success. The discussion around what it takes to be a success long-term investor was particularly interesting as Buffett reinforced the need to be patient and embrace the boring aspects of the process. Many investors often believe they need to understand every complex financial product in order to build wealth over time. Buffett reminds us that common sense still wins out.

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  • Report this Comment On May 12, 2014, at 1:54 PM, MelisssaLi wrote:

    At this stage, Buffett probably profits from every single bit of advice he gives. This is everything a family needs to know about money:

    Step 1: Create an emergency account of $1000

    Step 2: List all debt SMALLEST to LARGEST, and Pay off THE SMALLEST FIRST. Then, you snowball the payment (once paid off) into the next biggest, creating a SNOWBALL EFFECT.

    Step 3: Save 3-6 months of monthly expenses and at the same time, lower them! Cut car insurance to $25/month (check Insurance Panda), cut gas to less than $50/month (check Gasbuddy), get rid of cable TV (check netflix and aereo).

    Step 4: Stash away 15% of income for Retirement

    Step 5: Save for KIDS' college savings (at 12%, accounting for inflation rate).

    Step 6: PAY OFF THE HOUSE

    Step 7: Give, Invest, and Spend your Accumulated Wealth

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