With no savings at 30, I’d use Warren Buffett’s 3 golden rules to build wealth (2024)

FAQs

What is Warren Buffett's golden rule? ›

Buffett's headline rule is “don't lose money” and his second rule is “don't forget rule one”. This might sound obvious. Of course, it is. But it's important to look at the message within.

Warren Buffett's Advice

Buffett shared his advice during an interview with CNBC, in which he suggested that savers should continually buy shares in an S&P 500 index fund, and simply keep buying it “through thick and thin, especially through thin.”

Warren Buffett 1930–

Rule No 1: never lose money. Rule No 2: never forget rule No 1. Investment must be rational; if you can't understand it, don't do it. It's only when the tide goes out that you learn who's been swimming naked.

His fortune is largely tied to his investment company.

The vast majority of Buffett's net worth is tied to Berkshire Hathaway, his publicly traded conglomerate that owns businesses like Geico and See's Candies and holds multibillion-dollar stakes in companies like Apple and Coca-Cola.

Buffett is seen by some as the best stock-picker in history and his investment philosophies have influenced countless other investors. One of his most famous sayings is "Rule No. 1: Never lose money.

A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.

Buffett has long advised most investors to use index funds to invest in the market, rather than trying to pick individual stocks. By picking individual stocks you're working against the pros who have extensive intelligence on companies.

Warren Buffett typically does not give money to individuals, although he frequently donates to charities. However, he has in the past forwarded individual requests for money to his sister, Ms. Doris Buffett, who operates an organization called the Sunshine Lady Foundation.

I read annual reports, and I read a lot of other things, too. So, I've always enjoyed reading. I love reading biographies, for example.” – Warren Buffett. So Buffett says he reads around 5-6 hours daily, including newspapers, magazines, 10Ks, annual reports, and biographies.

What will never lose value? ›

"A diamond retains its value because there is a finite supply," he said. "The basic laws of supply and demand maintain that as demand increases, value goes up. With lab-grown diamonds, there is an ever-growing supply but not an overwhelming demand.

But there's more to this American business magnate than just his job. Despite his roughly $116.7 billion net worth, according to Forbes, the fifth-wealthiest man in the world enjoys a life of simple taste, frugal living and generous philanthropy.

In conclusion, the 4 golden rules of investment - start early, watch out for costs, stick to your goals, and diversify - collectively play a crucial role in building a resilient and rewarding investment portfolio. By starting early, investors can benefit from compounding returns over time.

Buffett presented a three-step exercise to help streamline his focus. The first step was to write down his top 25 career goals. In the second step, Buffett told Flint to identify his top five goals from the list. In the final step, Flint had two lists: the top five goals (List A) and the remaining 20 (List B).

Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.

1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.