Warren Buffett's 5 Best Pieces of Money Advice

Buffett is one of the most respected investors of our time. Here are some of his tips to learn from.

It's fair to say that Warren Buffett is a legendary investor. He's not only a self-made billionaire, he's also the type who likes to share the wealth by teaching others to manage their money. Here are some of his top financial tips.

1. Save before you spend, not the other way around

Saving money is your ticket to growing wealth. Buffett is a firm believer in the power of investing, but to invest, you first need to set aside money. And if you spend all of every paycheck, you can't do that.

That's why automating your saving is smart. Most banks allow you to move a portion of your paycheck automatically from your checking account to your savings account before you get a chance to touch it. That, in turn, can prevent you from spending what you should be saving. You can also automate your savings by enrolling in your company's 401(k) plan, or by signing up for an IRA with automatic transfers.

2. Always be prepared for the unexpected

You never know when an unplanned bill might land in your lap, and if you don't have the money to cover it, you may have to rack up debt and pay costly interest. That's why Buffett is a big fan of emergency funds. A good rule of thumb is keep enough money in your savings account to cover three to six months of essential living expenses.

3. Don't buy a stock today you wouldn't want to own in 20 years

Buffett believes you can make a lot of money by investing in the stock market. But it's important to take a long-term approach to buying stocks. If you ask him, the ideal holding period for any given stock is "forever." But generally speaking, he advocates buying stocks that you plan to hold onto for a very long time.

4. Invest in your own success

Just as you can invest by buying the right stocks for your portfolio, investing in yourself could be your ticket to boosting your wealth. Don't be afraid to go back to school for an advanced degree, take an online course, or do whatever is necessary to set yourself on the path to career growth.

5. Take advantage of a long-term mortgage

Buffett is a big fan of financing a home with a 30-year mortgage, especially when rates are low (which happens to be the case today). When you take out a long-term loan, you buy yourself flexibility by not locking yourself into the higher payments that come with a shorter-term loan.

The great thing about mortgages, too, is that you can always refinance if the rate you lock in for 30 years doesn't end up being the most competitive. In that regard, you take on little risk when you sign a 30-year loan.

Warren Buffett is generous with his financial advice, so it pays to follow it. Clearly, his strategies have worked really well for him, and they may serve you well, too.