This is a reposted article from Yahoo!Finance (June 28, 2011)
Warren Buffet (left photo), the third richest person in the world with a net worth of $45 billion according to Forbes Magazine, has been known as America's most brilliant investor for a longer time. His shrewd investing style and intelligent business strategies made his business flagship, Berkshire Hathaway (Fortune Magazine's third most Admired Company next to Apple and Google), one of the largest investment companies in the world today. However, Buffet is also known for his legendary frugality and money pinching habit. While other world billionaires lived in fabulous mansions, Buffet remained in his modest Omaha home which he bought in 1958 at $31,500.
Here, Financially Fit of Yahoo Finance covers tips on how to build wealth and success and listed the frugal Formula of the man famously dubbed by the international media as "the Oracle of Omaha" which might help us invest and save more money.
Live life like Warren Buffet! Follow the following tips:
1. Live Below Your Means.Being wealthy isn't just a product of your salary or investment prowess; it's learning how to save.
"We can make a lot of money, you can make a little bit of money, but the second you spend all the money is when people get into trouble. Saving is the key to preserving your wealth," says Ed Butowsky, managing partner of Chapwood Capital Investment Management, a firm that manages money for wealthy individuals.
As many Americans realized during the booming real estate market, just because you think you can afford something doesn't mean you should buy it. Keeping an eye on your bottom line will pay dividends over the long term.
2. Bounce Back From DefeatWith nearly 15 million workers unemployed right now in the U.S., it's easy to get discouraged. Don't! Most successful and wealthy people have overcome obstacles and failure along the way. Steve Jobs was ousted from Apple when he was 30. Today, he's a billionaire and a legend. Plus, after getting fired, he created another billion-dollar media company, Pixar.
"Bouncing back from defeat is something all great achievers have. They have this undying belief good things will happen and will continue to happen," says Butowsky.
Take Michael Jordan. "His airness" was cut from his high school basketball team. Motivated by the rejection, Jordan became a star the next season. The rest is history.
3. Self-PromoteRegardless of the profession, the rich and successful tend to have a strong sense of self-worth — key to skillfully navigating an upward career path. Mark Hurd, who was ousted as CEO of Hewlett-Packard in August, couldn't be kept down for long. Using his business skills and connections, in September, Hurd was named president of Oracle. (Hurd and Oracle founder Larry Ellison are known to be close friends.)
4. Have Street SmartsBernie Madoff lived the high life for decades, scamming unsuspecting clients, with a money-making formula that proved too good to be true. Only afterward did we learn that with a little due diligence, most clients could have easily uncovered the fraud.
But it's not only the swindlers and the con men you have to watch out for. Many times, friends and family take advantage of the rich. Whether it's a handout or an investment idea, Butowsky advises his high net worth clients that in most cases, it's wisest to just say "no." The best way to do that: have someone else do it for you.
"You need to really set up a wall between you and your family," he advises. "If you don't want to give them (family or friends) money ... saying no is probably a good idea."
5. Buy CheapThe rich can afford to splurge, but that doesn't mean they do.
John Paulson, a billionaire hedge fund manager, bought his Hamptons "dream house at a bargain basement price," according to Greg Zuckerman, author of the Paulson-based book, "The Greatest Trade Ever." The story has it that Paulson eyed the home while it was in foreclosure. Finally, on a rain-soaked day, he purchased the home on the Southampton town hall steps. He was the only bidder.
On New York City's Upper East Side, Michael's— The Consignment Shop for Women— has been a bargain-hunting destination for more than 60 years. "We have a good percentage of women who can afford to shop on Madison Avenue but really like the idea of saving that money," says proprietor Tammy Gates.
From Chanel to Gucci and Louis Vuitton, the store specializes in high-end designer merchandise for a reasonable price. Speaking of her clientele, Gates says, "they're wealthy for a reason. They recognize that bargains keep people wealthy. Paying top dollar when you don't have to doesn't make sense."
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