3 Personal Finance Tips From Billionaires
By: Chris Neiger
You may be looking for an edge in your personal finances -- something that can help you rethink your approach to money and start getting ahead financially. If so, you might benefit from hearing what billionaires have to say and learning from their experiences. So, here are a few lessons on frugality, investing, and generosity from some of the wealthiest people in the world.
1. Live simply and be frugal
Most people don't associate billionaires with penny-pinching, but that's how the world's sixth richest man -- Carlos Slim Helú -- approaches his personal finances. Despite having a net worth rivaling that of Bill Gates and Mark Zuckerberg, he has lived in the same modest house near his office (and his birthplace) for over 40 years. And he has also been known to drive himself around Mexico City in an old Mercedes.
Similarly, IKEA founder and billionaire Ingvar Kamprad once shared why having lots of money doesn't mean you should indulge yourself to no end:
I'm a bit tight with money, but so what? I look at the money I'm about to spend on myself and ask myself if IKEA's customers can afford it ... I could regularly travel first class but having money in abundance doesn't seem like a good reason to waste it.
2. Have a long-term investing strategy
There's no better way to build up your wealth than let your money earn even more money for you by investing in stocks or index funds. John Bogle, the founder of The Vanguard Group and the creator of index mutual funds, says many things will try to distract you from your long-term goals, but you have to stay the course: "Do not let false hope, fear, and greed crowd out good investment judgment. If you focus on the long term and stick with your plan, success should be yours."
Bogle's words aren't puffery, either. The index funds offered by his company are some of the easiest ways to build long-term wealth because of their historic 10% annual returns and low expense ratios.
3. Be generous
Microsoft founder and billionaire Bill Gates is well known for his philanthropic work, and his views on being generous can inspire all of us to support causes we believe in, no matter what our income levels are.
"My wife and I had a long dialogue about how we were going to take the wealth that we're lucky enough to have and give it back in a way that's most impactful to the world," Gates told The Telegraph three years ago.
When it comes to his fortune, Gates has said, "Its utility is entirely in building an organization and getting the resources out to the poorest in the world."
The good news is that the United States is already one of the most generous countries in the world, according to the Charities Aid Foundation World Giving Index report from last year. And according to Giving USA's annual report about philanthropy in America, individual charitable donations increased last year by 2.6% (adjusted for inflation) to $281.8 billion.
Be smart with your money
It's easy to skim through a list like this and assume that just because the people mentioned above are billionaires, their ideas aren't applicable to our own personal finances. But these simple, straightforward approaches to spending, investing, and giving are all practical ideas that any of us can put to use now.
The $16,122 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after.