Berkshire Hathaway founder and chairman, Warren Buffett has offered a wealth of investment advice over the years. Known for his long-term approach to stocks, sticking to fundamentals, and taking calculated but thoughtful risks, the so-called ‘Oracle of Omaha’s’ wisdom often makes the rounds online.
In the investment circles, Buffett and his long-time business partner and friend, the late Charlie Munger, are known for their no-nonsense approach to doing business and relatively frugal lifestyles when compared to their immense wealth.
Quote of the day Warren Buffett
“I’m not interested in cars, and my goal is not to make people jealous. Don’t confuse the cost of living with the standard of living.”
What does Buffett’s quote mean, how can it benefit you?
The quote is something the ace investor told author Alice Schroeder, who wrote his biography ‘The Snowball: Warren Buffett and the Business of Life’, first published in 2008. But Buffett has been consistent in his philosophy. Speaking as a mentor for Levo Office Hours in May 2013, Buffett again repeated the sentiment.
He said, “Cost of living does not equate to standard of living. The standard of living is achieving what you want, working with people that you love and you don’t need that much money.” He did acknowledge his love for using a private jet as an indulgence, but added that leaving aside taxes and charity, he can easily live on $1,00,000 a year.
“I wouldn’t live better if I had eight houses, if I had a 400-foot yacht or anything of that sort. I’m (living) in a house that I bought 55 years ago. It’s warm in the winter, it’s cool in the summer. It has everything I wanted, plus, it has all kinds of good memories. I can’t imagine living any better. I paid $31,500 for it, I could pay $31 million for a house, and it wouldn’t do for me what this present house does,” he explained.
Buffett’s lived experience is something most investors seeking to build wealth can emulate. Most financial planners advise that purchases made solely to impress others or appear successful could be detrimental to your long-term finances. Chartered Accountant (CA) and financial advisor Nitin Kaushik notes that with medical and lifestyle inflation ever rising, current retirement plans could likely fall short.
“For the ₹20,000/month you may spend on “lifestyle maintenance” — branded apparel, car EMI or luxury dining — you are not just losing cash but spending future wealth. At a 12% market return, that ₹20,000 monthly spend costs you ₹1.9 crore in wealth over 20 years,” Kaushik wrote in a post on social media platform X.
He added that true wealth is unseen — in the compounding portfolio, paid-off assets and unused credit lines.
Edelweiss Mutual Fund Chief Radhika Gupta suggests a balanced approach to tackling the wealth-killer called lifestyle inflation. A simple 10-30-50 rule: Save 1-10% in your 20s; save 30% in your 30s and save 50% in your 40s and above.
But like Buffett, she does believe in some indulgences. “Tax is deducted at source. Why not do the same with your savings? That’s SDS — Savings Deducted at Source. Automate your SIPs, RDs (recurring deposits) or FDs (fixed deposits) before you even see the money. You can do both — buy the handbag and save money for the startup,” she added.
Who is Warren Buffet — the ‘Oracle of Omaha’?
Warren Buffett, alongside friend and business partner Charlie Munger were the architects who over nearly 60 years transformed Berkshire Hathaway Inc. from a failing textile maker into an empire, worth billions. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.
Notably, in January this year, Buffett handed over the reins and CEO position to successor Greg Abel. But his “bull run” with Berkshire has been legendary — gaining more than 55,00,000% returns over 60 years (1964-2024), to building the group to $1.2 trillion, and expanding Class A shares to worth $167 billion.
Known as the ‘Oracle of Omaha’ for his uncanny prediction on stocks, Buffett gained fame and investor confidence for handpicking companies (Apple, Bank of America, Coca-Cola, etc.) that exploded and now account for 70% of Berkshire’s $263 billion stock portfolio. He termed this as “one wonderful business can offset the many mediocre decisions that are inevitable”.
Buffett’s net worth is estimated at $152 billion, making him the 10th richest person in the world, according to the Bloomberg Billionaire Index.
