Personal Finance

Warren Buffett: Here's Where You're Wasting Hard-Earned Money

Ian Cooper

Published: January 11, 2025 10:22 am

As one of the most successful investors in the world, Warren Buffet’s advice is certainly worth listening to. After all, at the age of 94, he’s now worth well over $148 billion.

In fact, if most of us listened to him between 1965 and 2022, as Berkshire Hathaway returned a 19.8% compounded annual gain, most of us wouldn’t be worrying about money today. Not only has his advice created unbelievable fortunes, but it has also helped many avoid unnecessary financial mistakes. That includes wasting money on things such as:

Key Points About This Article

• Not only has Warren Buffett’s advice created unbelievable fortunes, but it has also helped many avoid unnecessary financial mistakes.
• Buffett says one of the most important investments you can make is in yourself.
• Buffett also believes you can do better things with your money than give it to lenders as interest.
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

Poor Investments

One of the most important investments you can make is in yourself, according to Buffett.

“At Berkshire Hathaway’s famous annual shareholder meetings and in interviews, Buffett often repeats his motto: to stand out, you must improve yourself to the point where others can’t ignore you. This means going above and beyond to become excellent at your craft through continuous learning and growth. For employees, Buffett advises becoming indispensable at your job by being the absolute best. Learn everything about your role, industry, and company so you’re a valued expert,” as noted by LinkedIn.com.

Credit Card Debt

While Warren Buffett does hold an American Express card, he’s critical of credit card debt and recommends using cash instead. By using cash, he avoids accruing debt and interest. Buffett also believes you can do better things with your money than give it to lenders as interest.

Cheap Investments 

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” he once said at a Berkshire Hathaway shareholder meeting.

“When you prioritize quantity over quality, the short-term gains may not mean much (and it could cost you more) in the long run,” added GoBankingRates.com.

Unnecessary Spending

Buffett has lived in the same house in Omaha for more than 65 years, which he bought for $31,500. He used a $20 flip phone until 2020 when he finally switched to an iPhone 11. He never spends more than $4 on breakfast. That’s because he doesn’t believe in unnecessary spending, even though he has more than $148 billion.

New Cars

Reportedly, the billionaire drives a used 2014 Cadillac XTS, which replaced his 2006 Cadillac DTS, which only had 19,000 miles on it. “I have everything in life I want; it’s a very simple thing. If there’s anything that money could buy that I wanted, I would do it this afternoon without hesitation,” Buffett said at a Berkshire Hathaway meeting.

“The truth is, I only drive about 3,500 miles a year, so I will buy a new car very infrequently,” he said, according to Forbes.

Paying Full Price

He’ll also never pay full price for things. He once paid for lunch with Bill Gates at McDonald’s with coupons. “Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket, and pulled out … coupons!” said Gates in a 2017 annual letter, as quoted by CNBC.

Going Out to Dinner

Warren Buffett once said, “I like eating the same thing over and over and over again. I could eat a ham sandwich every day for fifty days in a row for breakfast,” as quoted in Alice Schroeder’s biography, The Snowball: Warren Buffett and the Business of Life. 

Wasted Opportunities

As noted by GoBankingRates.com, “In his early years, Buffett picked up side hustles and made money by delivering newspapers, selling used golf balls and buffing cars. He also looked for new opportunities, and when he couldn’t find any, he’d create them.”

At the same time, “He’s been just as upfront about missing out on early investments in Google and Microsoft – companies that have transformed the world in ways few could have predicted. Buffett didn’t hold back during a Berkshire Hathaway annual meeting, labeling these missed chances as ‘stupid mistakes,’” reported Benzinga.com.

Gambling

He finds gambling “socially revolting.”

Living Beyond Your Means

Buffett advises that you don’t live beyond your means. If you see something you like, he says to ask yourself whether you really need it or just want it.

As Suze Orman has said, “If you just simply used your money to purchase needs versus wants, you would find the money to invest in your retirement account.”