Jeff Bezos, founder of Amazon, once asked Buffett: “His investment philosophy is very simple. So why don’t people copy his approach?”. Buffett replied, “Because nobody wants to get rich slowly.”

Mrs. Graham, former president of the Washington Post, once said: Buffett is the stingiest person I have ever seen. Bill Gates also complained: Buffett invited me to eat at McDonald’s and actually took out a voucher. Warren Buffett is willing to accept this. Saving money to the maximum, continuing to earn and persisting in saving money is his lifelong rich habit. From Warren Buffett’s savings philosophy, here are 3 stages we can practice to become richer.

1. First stage: Save money and refuse to spend before saving

In 2008, when Buffett replaced Bill Gates to become the new richest person in the world, the media congratulated him. He humorously said: “If you want to know why I can surpass Bill Gates, I can tell you it’s because I spend less. This is my reward for saving.”

Although he appears humble, throughout his life, Warren Buffett has never spent money first. He did not borrow money to invest, nor did he overspend.

Buffett once said in a speech at the University of Notre Dame: “Never in my life have I borrowed a large amount of money. Never and never again.”

Many wealthy people own many luxurious houses and collect a series of luxury cars.

Buffett has only one home located in his hometown of Omaha, where he has lived for more than 60 years. He also only owned one Cadillac, had used it for 8 years, and only when it really couldn’t run anymore did he buy a new car.

He never spends unnecessary money on luxury products. Buffett also dresses very casually and on weekends, he often wears a simple T-shirt. He chooses suits that are extremely traditional in style because this helps him avoid having to buy multiple ties to match.

The smartphone Buffett used was purchased in 2020. For many years before that, he only used a flip phone that cost $20. This is exactly how Warren Buffett saves his money, never spending it first.

But looking back, there are so many temptations around us. Some people can’t help but buy limited edition bags, some people can’t help but buy new electronic products when they see them. Not to mention discounted products during livestream sales sessions, promotional activities of milk tea shops…

There are consumer traps everywhere and saving money is really difficult.

Buffett has a saying: “Don’t spend money first, spend money after saving it.”

The most basic reason for increased consumption is still having money in your pocket. If your daily expenses are 200,000 VND, when you still have 2,000,000 VND in your pocket, you will not be able to control yourself. But if you only have 1,000,000 VND, and you still have half a month to pay your salary, then you don’t dare to spend in advance.

The amount of money in a person’s wallet often reflects that person’s spending attitude. Learn to set your own spending limits and only spend a set amount each month and you can save a lot of money.

You have to believe that in the world there are not many people who got rich overnight, every rich person started by saving money.

2. Second stage: Earn and improve your earning ability

When Buffett was 12 years old, he showed his talent for investing. He discovered that he was interested in numbers and finance, so he read a lot of these books.

By the time he graduated from university, he had many successful investment experiences. According to initial experience, just keep working and you can make a lot of money. But he chose to improve himself further. He enrolled in graduate school at Columbia University.

During this time, Buffett continued to gain experience and improve his investment system, before graduating, his annual capital growth rate exceeded 61%.

But at this time, Buffett also has a huge weakness: he has difficulty communicating socially. He is very afraid of speaking in public and crowds.

But he understands that sometimes he has to speak in public, which is a very important s𝓀𝒾𝓁𝓁 for him. Therefore, he went to New York twice to learn how to speak publicly according to Dale Carnegie’s method.

Thanks to this course, when he returned to Omaha and taught, he could confidently present in front of the class. Even when facing more than 50,000 shareholders in the annual shareholder meeting, he still showed a very natural expression.

This is exactly how Warren Buffett makes his money, by improving his personal earning power.

When writer Yataro Matsuura was young, he was just a small construction worker with a junior high school education. But he discovered that he liked reading and taking notes. So he reads books, watches movies every day and writes down his feelings. Fearing that he would not have more energy due to heavy work, he started jogging and exercising every day to improve his energy.

Buffett said: “No matter the circumstances, individual talent is not subject to inflationary pressure.” Making yourself valuable is making money.

Naval, a leading investor in Silicon Valley, once coined the concept of getting rich: “The most important s𝓀𝒾𝓁𝓁 for getting rich is finding your talent and becoming a lifelong learner.”

As you continue to hone in on what you’re good at and become the best in it, you can make the most money in it.

3. Stage three: Save money and follow the compound interest mindset

In the winter of 1939, Buffett and his sister played in the snowy yard. Buffett grabs snowflakes with his hands and kneads the snowflakes together into snowballs. After the snowball got bigger, he pushed the snowball to roll slowly. With each push, the snowball would receive more snow and get bigger and bigger.

This is compound interest thinking: each snowflake now is the foundation of a larger snowball in the future. Warren Buffett has always been a practitioner of compound interest.

When Buffett was 17 years old, he started putting money in the pinball machine. He bought an old pinball machine for $25 and convinced the barber shop owner to bring it into the shop for customers to use, and the two of them would split the profits.

He then invited an associate to join, responsible for the daily maintenance of the pinball machine. Over the first week, after deducting wages and profits, he earned 25 USD. He then used the money to buy a second pinball machine and put it in another store. He eventually placed pinball machines in seven or eight different barbershops in town and profited nearly $200 a week.

Later, when Buffett participated in stock investing, he often reinvested stock dividends every year to earn more profits.

At the age of 52, Buffett’s assets were only $376 million, but since then, his wealth began to grow exponentially. Of his $84.5 billion net worth, $84.1 billion was earned after age 52.

This is the power of compound interest. If Buffett spends the first $25, he won’t make the next $200 each week; If he always took dividends, pocket stocks, he would not have a net worth of $84.5 billion. In Buffett’s eyes, $1 now is $10 or $100 in the future. But few people in life understand this truth.

Some people put money into potential projects around them, only earn a little profit in the first few years, so they hastily withdraw their investment capital. Some people force themselves to save, but after saving for a few months, they find that the amount is not equal to someone else’s monthly salary, so they give up. But changing from quantity to quality requires not only quantity but also time.

For some things, you may not see results after a day or two, but with compound interest over time, it will definitely give you huge profits.

Jeff Bezos, founder of Amazon, once asked Buffett: “His investment philosophy is very simple. So why don’t people copy his approach?”. Buffett replied, “Because nobody wants to get rich slowly.”

The essence of getting rich is the gradual accumulation of habits that help people easily get rich. Keep doing it the right way and on the right path, becoming rich is just a matter of time.