9 Wealth Lessons from Warren Buffett

Ohhh he's only one of the most successful self made billionaires in the world, and a unicorn investor in his own right. So he has a lot of wisdom and lessons to share on money, wealth and also life. 

I dive in to the 9 lessons and what they mean (often misinterpreted) and how to apply them to your own life and wealth building journey.

xo
Simone

P.S. I would LOVE for you to review the podcast and share the love - AND screengrab your review and send it in to [email protected] to be put in to the monthly prize draw!

Listen in here, and where you get your podcasts:

Prefer to read the transcript?

If you want to keep on earn more and make more money you're in the right place. I've spent over 10 years learning from the most brilliant minds in money, wealth, and investing to take myself from 20 K in debt to a seven figure investment portfolio. Join in. As I share the secrets towards more growth, money investing and ultimately freedom. My name is Simone Masa, Huggins, and welcome to ms. Wealthy's kiss my money podcast.

You know, there are a couple of just unicorn people. Let's call them unicorns that just, uh, honestly they just seem to sparkle and drop magic fairy dust, wherever they go. Like everything they touch turns to Midas gold, right? And one of those people is Warren buffet. And he's one of my most favorite people. I've, I mean, I've never met him personally, but he is the most, one of the most grounded down to earth, just simple, uh, also intelligent, but very humble people in the world that, uh, have honestly just have so many lessons for investing in wealth, personal finance life. And he has the most incredible quotes. If you ever watched any of his interviews, just the way he talks about things in such an eloquent and articulate way, but also encourages people to honestly come back to basics and come back to the simplicity of things.

And I want to share some of his biggest lessons that I have found in my life have made me a better person. They has made me a better investor. He's made me better at money. Um, and I want to share them with you because he has a lot to teach. Not only is he worth over, I think it's now over $86 billion and built everything from the ground up himself. He has his own investment firm. Um, you know, he's, he's well into his seventies I think. Um, and he just has really Sage and really solid advice. And so I'm going to share with you some of his quotes, he has so many, honestly like hundreds and hundreds, and so many people quote him. Uh, but often people don't actually know what he means with some of his better known quotes. And I want to give you an example and show you what he actually means.

I've dived a lot into how he works, how we, things I watched him in interviews or read books about him. Um, like I said, just cause he has such incredible advice just to teach anyone. Um, and this doesn't necessarily apply to investing on money. I'm going to refer to investing lot and money a lot, but think about it in your own life too. Um, so one of, one of his favorite quotes that he has, and it's probably one of his primary ones is he has two rules, two rules for life, two rules for investing two rules for like money, right? Uh, and the first one is to never lose money. That's his first rule. There's no rule. Number two is never forget real one. And re a lot of people really confuse this and they don't kind of understand, particularly when it comes to investing.

People think that he does that mean that you should keep all your money in savings accounts. Does that mean like, what does that even mean? Um, but actually when you read into a lot of his stuff, he does not believe in saving. He thinks that saving is not a good idea, obviously aside from things like an emergency fund, but he is very clear about his position on cash, losing value when it sits in a savings account over time because of inflation, uh, which I've spoken about before a lot on this podcast. Um, but when he says never lose money, uh, what he's actually referring to is timing the market and selling when there is a correction. And this is, this is the biggest reason. This is the number one reason of why people are not successful as a private investors, uh, or even as financial plan is, and people, you know, investment firms and funds that try and predict the market.

Uh, this is the number one reason that people lose my name and it is selling when there's a correction of selling when there's a market downturn, because of the fear factor, because of worrying that they've lost some money, but here's the thing. There is a difference between realized and unrealized gains. And I spoke about this in quite a lot of depth recently, um, with my investing bootcamp members in the most recent, um, like live coal that we were all on together. And I spoke about this in terms of like, just because the value of something that you hold and this could be houses could be stocks. It could be anything goes up in value. It doesn't mean that you've actually banked that money. You don't bank it until you sell it. And so people get like really freaked out of like, Oh my God, I've lost money because the market's had a temporary down term, you haven't lost anything.

The market has gone down or the value has gone down, but there has an actually been any physical loss until you sell. Does that make sense? So if you, if you buy a house, right, and that goes down in value, like the bank comes out and they do evaluation and that house has lost money. You haven't lost money because you're not selling at that moment. If you choose to sell and you do sell it a loss, then yes, you did lose money in that transaction. But what happens is people get freaked out because they think that just cause as a correction, that because they've lost money and they're fearful of any further downturn that they sell and then they make a loss. And then of course the market rebounds as it always does. And then all of a sudden they've banked a loss and they have to get back in when the market's already gone up.

And this is what he means when he talks about never losing money. And obviously there are also other things about the ways that you can invest with preservation of capital. So maintaining your capital, maintaining the amount that you invest. Um, but also having it grow and, and properly grow, not, not like savings account return or term deposit or CD deposit, um, returns, which are so ridiculously low, particularly right now with the current interest rates. But, um, actual other things that, uh, less volatile, but still go up in value. Right? So that's what he is referring to when he says never lose money. That's what he means about not predicting and trying to time the market. Um, okay. Number two, what he talks about is he has this quote and I love it is we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

And this again, refers to timing the market. And I don't know if I've explained it properly. I know I've mentioned it previously, but timing, the market is speculation. Trying to guess what's going to happen trying to guess and be like, Oh, I think the market's gonna go up. Or I think the market's going to, you know, guide down next month. So I'm going to wait for when it goes down and then I'm going to buy, and this just never works. Like I said, it's just on the flip side of the number one reason people lose money or the number one reason people don't make money trying to do it on their own or trying to like, guess what is going to happen with the market is they don't know cause no one knows and a really good sense check for you. If you are someone who tries to stock pick or tries to speculate or tries to guess what is going to happen when the market goes down or up is to look at any portfolio that you have, if you, if you were doing this over the last year and then even the year before that.

So obviously don't try and don't look at your returns for just one year, cause that doesn't work does it because we need to look at it over like at least a five year period to get an average. So look at what happened has happened for you over the last ideally five years or at least whatever you have. And to give you an example, the market in general, the stock market in general went up, uh, just over 30% in the U S last year in 2019. And I think it was just over 23% in Australia in 2019. Uh, so obviously they're way bigger averages, right? I've spoken before about, on average, the return over, or, you know, the entire time that the stock market has been around is about 10% on average, obviously that's well over double three times in the U S uh, and wouldn't have those years, every single year.

Uh, but it's to sense check, if you do invest yourself and you try and speculate and try and stock pick, how are you performing against the market? Um, okay. Number three, prices, what you pay value is what you get. This is so good and this is a life lesson, and this is something that I have definitely come to terms with my, within my own kind of value sensing and really understanding what is valuable to you. And this is really important when it comes to your personal value. So not like monetary values, but actual, like what is valuable to you? Is it joy? Is it gratitude? Is it time? This season even comes to play? When we think about the love languages, if you've ever read that book about like how you value and receive love, right? And some people value others, other, some things over something else, right?

Like there might be a really high value on travel and holidays. Whereas other people just have no desire for that. There might be a really high value on certain clothes or, you know, a certain log. For example, I don't really like, I actually don't like getting my hair done. I find it tedious. It's not relaxing. Um, I also don't really have a great hairdresser that I've ever found that I love. Um, but on the flip side I love getting pedicures. Um, I really value business class flights or like first-class flying. I don't particularly like economy or coach. And particularly when it's long haul, which a lot of, uh, international flights from Australia are because we are so far removed and we're a little Island. Um, but I really value that. And I remember telling my girlfriend that I had just recently booked a business class flights to Bali, uh, for a trip I'm going to for the manifestation baby retreat in April.

And she was, she like looked at me dumbfounded. She was like, what are you, why, what a waste of money she said, and I just smiled. And I was like, okay, cool. But she doesn't value it. And then she said, well, if you're going to do that, like at least make sure that you drink, meaning, drink the alcohol. Uh, but it's not about that for me. So for me, it's about the process of checking in. It's about sitting the lounge beforehand. It's about the space. It's about lying down. Um, it's about one of them being an overnight flight. And I value my slate. I've spoken about this before I value my sleep. Like nothing else on earth, because it's just so important to me. I don't function well with sleep deprivation. No one does. Um, and for me it is the basis of my energy and how I can show up for the world and how I like literally how I operate.

And so if I land and I don't sleep overnight, which I don't, I don't sleep on flights basically. Um, I can do, if I'm lying down, uh, then that ruins my entire next day. Right. And it's just, for me, there's just, there's an intrinsic value of just feeling like I'm, I'm taking care of on a flight. And for me, that is business. That's not worth it for a lot of people, particularly for it's only a seven hour flight. It's not that long. It's not like it's a 15 hour. Like it is when you, when I fly to the U S for example, but like, think about what is actually valuable. Whereas on the flip side, that same girlfriend, uh, pays way more in, in rent, in home living expenses than I do. Um, she pays way more for a hair, like it's like two or $300 a month on hair.

And I don't even think that I spend that in a year. Like I'm not even kidding. And like, my hair is perfectly fine. It's nice. I just, I don't, I don't get it dyed. I don't like, I know I would just, I don't see the value in it. I just, I've never seen the value in spending like, you know, a thousand dollars every couple of months on her. So this is really important when it comes to understanding what you value in life, right. Uh, to give you another example that same girlfriend, um, doesn't see value in, um, Lulu lemon, yoga, where, whereas to me, I want to buy the best yoga wear, even though I wear it to like, I wear it to Pilates and yoga. And I actually live in it day to day as an entrepreneur, as a business owner, being at home as the time in my home office.

Um, I am most of the time in my Lulu lemon, whereas my girlfriend just doesn't see the value. She doesn't get it. She's just does not understand how anyone could possibly spend $150 on a pair of like tides yoga pants. Um, and she prefers to buy her pants from Kmart or target. Like there's no wrong answer. There is literally no wrong answer. And if you value, um, you know, like more expensive things or whatever it is over others, that's not bad. That's not good. That's just being clear about what you value and, and understanding that the press is not the value does that make is do you get that, that whatever price you pay, it's not the value. Um, it's the reason you go to restaurants and you see more expensive restaurants, right? Is the value higher, or maybe they have better service. Can you really put it like, can you put a price on that?

No. Most of the time, not sometimes you pay a higher price because the value is convenience. Sometimes you pay a higher price because it's like a better knowledge or you feel safer, or like so many things, right? Like, think about the value we pay for now with the convenience of Uber's and Uber eats, right? There's a value in not getting out of your sweats and leaving the couch and having food delivered to you. Um, and I used to get a wreck, a massive hookup on this when I'm, and I've come a long way from, uh, myself, like kind of like selling myself as a business owner and entrepreneur and selling my products, particularly selling, investing bootcamp. And I used to get real hookups about it, and this is my own money block. And I have, I have money blocks, right. Everyone does. Um, and limiting money beliefs that hold us all back.

Like, and I've just been, it's just been a process of me working through mine. But when I was first kind of coming to the stages of selling, investing bootcamp, and I had my first person that said to me, that's too expensive. And I just like it, it took me back of course, the first time. And it was a process of me working through it and going, you know, what the fuck it's not because when I look at the comparison and, and you know, it's not always necessarily about comparison, but it's also about the time. It's not about you spending six or seven or eight hours with me on Kohl's or the, you know, information or the knowledge that you get inside the program. It's not about the private group. It's not about, um, the actual time it's about that. I have decades of trading knowledge and international finance knowledge.

It's also about me encouraging and empowering you to step into yourself and making your own decisions and learning to think for yourself. It's about that over handing your power over and over spending thousands of dollars every year to a financial advisor where you never learn yourself. And when I started to really step into that and truly understand what the price is of financial ignorance and lack of financial literacy, I was like, it's actually with tens of thousands of dollars, it's just that whoever thinks that it's too expensive, quote, unquote, obviously doesn't understand, or maybe just doesn't value financial literacy doesn't value financial education, or maybe they just don't value financial. And that might seem crazy because pretty much every single person listening right now values financial freedom to some degree, right. Otherwise, why are you listening to me talk about Warren buffet, why you're listening to talking about wealth and money, right?

And so when you think about that and you might be going, how could you not? And sometimes the, I find it a bit hard to wrap my head around how could someone not value freedom and time freedom, but it's just that maybe they've never thought about it. Maybe they're just not at that level. And so this was a really good learning prices. What you pay value is what you get. This was a really good learning for me and myself. And then, you know, think about this in your own life too. If you're a business owner or an entrepreneur and you sell product or services, think about the actual value that you provide. If you're a career woman, think about your time, think about your experience. Think about the energy that you put in and think about the results that you get for whoever it is, your clients, your team, like whatever, like it's not about your salary, your salary versus the price versus value is very different thing.

That was a big grant. Um, but it's really important to like create that distinction. Um, uh, and this is some way that, you know, I know that so many people get caught up on this, the price versus value thing, particularly on salary negotiations, particularly on selling yourself, um, and all that sort of stuff. Okay. Now I'm before, um, this one's a really sweet one. It's someone is sitting in the shade today because someone planted a tree a long time ago, and this is like obvious. And I know that it sounds like it's one of those like, Oh, but it is about patience, right? It is about learning and understanding compounding. And it is about kind of going do it now do it 20 years ago. Like, you know, think about where you're going to be 20 years ago and like plant that seed now, like do it now so that you can sit in the shade and the analogy is planting the seed and growing your fund, planting the seed and having shade means like starting to invest now and having the freedom to like, literally do what you want.

Um, so that you don't have to worry about it later. Okay. Number five. Oh, this is so good. So good. This one success in investing does not correlate with IQ. What you need to is the temperament to control the urges that get other people into trouble in investing so good. This one. And I really hope that this is starting to break down some of those barriers in believing that investing is only for intelligent people. So I Q is, um, like your intellect, like quotient, right? Like, so how intelligent you are on like the scale and you can do IQ tests and all that kind of crap, but it does not correlate like you as an investor has. And being successful as an investor does not correlate. You need to be intelligent. And Warren Buffett talks about temperament and controlling the urges that gets most people into trouble.

And he has another quote later on. I'm going to tell you about, but this is so freaking key. You guys, how much do I talk about psychology? Like so much, right. And the biggest reason, and I spoke about this as the number one thing, why people lose money in the stock market? It's not their actual action. It's not their intelligence, it's their temperament. It's that urge, it's their fear. And all of that is psychology. All of that is not controlling emotions around investing and that's all mindset. It's all psychology. And I talk a lot of like, I, I took, uh, uh, in fact, I probably need you to talk more about this in investing boot camp. But, uh, like I talk about, uh, in week three, we're coming up to week three and investing bootcamp right now, um, is the full areas of winning the investing game.

And I talk about this one being psychology, second, being time, third being risk, and fourth being returned and understanding those four in terms of winning the investing game. And psychology is such a big pot and understand like so many people say to me, uh, I just don't know how to do it. Like I'm not smart enough to invest. And it breaks my heart hearing that because as Warren Beatty says, it's not about your intelligence. Like, it's not about you. You can, you can get the knowledge. Like, I mean, you can come to me for the laundry. You can go to someone else for the knowledge, but like, it's not about being intelligent. It's about having the knowledge, knowing what to do, having the people around you, controlling your emotions around it, understanding, and, and honestly like understanding it enough so that your emotions don't overcome the knowledge of how things work.

Right. Uh, number six, predicting rain doesn't count building the Ark does such a sweet quote and he's referring to building Noah's Ark. So it's known about like, there are so many speculators when it comes to investing. Um, not just the new cycle of the crash is coming. The, you know, we're going to have like, whatever year. Um, but then you use loves to say how much of a crash is coming. Um, and they said they was been saying it year on year for the last five or six years now. And over the last five or six years, the market's gone up. Like, I think it's close to 70%. Like I said, the U S had a 30% year in 2019. It was about 20, 33 or so percent in Australia. And so, uh, there are so many speculators and by speculators, I mean, they think that they know what's going to be profitable.

They think they know what isn't going to work and they try and stop pick. Um, and how many times have you heard someone go? Oh, I got a great stock pick or like the number of times people have said to me, can you just tell me what stock to buy? Like thinking, hold on a minute, like, like what, and everyone wants that, like number one gold prediction, but it's not about predicting that doesn't count. It's building the arc. And what Warren Buffett is referring to here is literally just building the foundations of wealth building and understanding and getting the knowledge and building the arc that supports you when the rain does come, when the storm does come, or like not just sitting there predicting and thinking, you know, what's going to happen. Uh, I can have a seven. The best chance to deploy capital is when things are going down.

And this is kind of similar to his, you know, be greedy when others are fearful is, and this is really important. And this is why I urge everyone to, even if you feel like you're not ready to start investing, like right now, um, is to start to get the knowledge of investing. So that even when there is a correction that you can get in and you're ready for when the market does go down. Right? So for those who are already investing or investors, that you, you will probably know how to properly equip yourself for any correction, but, uh, if you currently aren't, what is amazing is when you start learning, you can deploy your capital, meaning put, like, start investing, put your cash into investments when the market does like, does that make sense? Cause that is like, it's like the style of a century.

Um, okay. Number eight. So good. So good. This one risk comes from not knowing what you're doing. Uh, if I could like put this on a billboard and this is what goes through my, this is going through, goes through my brain. When people make comments about, um, investing, being risky. And it's only because it's not understood, it's literally it, if you do it, like once you understand it, then all of a sudden you realize it's not risky. All of a sudden you that, Oh, crap, all of that fear and, um, bullshit associations I made with gambling, aren't actually true. Um, risk really does come from not knowing when you're doing now, is there an element to risk in everything that we do a hundred percent? Like you can walk out the road and get hit by a bus. You can like you can trip and fall.

And you know, like there, there is risk in everything, but we don't live in a bubble and you can't like rep Homosh Miller around you. Every time you go out, right. There is risk, of course. And so of course is risk and investing. Um, but most of it comes from not knowing what you're doing. So just educate yourself, like the biggest cost to anyone is not investing. It's actually financial ignorance and lack of financial literacy. Okay. Number nine, the most important investment you can make is in yourself. Yeah. So tree, um, and you know, I talk about assets a lot and assets are what, it's, what grows in value and pays money and you yourself, when you invest in yourself and when you, you know, whatever it is, whether it's personal development or whether it's like programs or like whatever grows you in value increases your value.

And it also pays meaning as you increase your value, you earn more like there's also that saying of the more you learn, the more you earn. And that is true to an extent, as long as you're learning knowledge and not just consuming information, and you're actually taking action on it, but you are your most important investment. And it's so important to understand and know that when it comes to investing in yourself and I've spoken a lot about the personal development that I've done in my life as well, and a big part of why I am, where I am is because I've taken that path. Right. Uh, and that's it, that's it, nine lessons. I was gonna round it up to 10, but a lot of what he does teach you, uh, you know, some of them are kind of repeats, so to speak. Um, okay.

What'd you think? Did you like it? Uh, do you love warm Bay? As much as I do? Um, he, his quotes are just, I just love it to apply to life and finance and money and everything like that. Um, and, and yeah, I wanted to also clear up some of the things he says, cause often as it's misinterpreted, um, all right, babes, thank you so much for tuning in. I am actually I am. There's one last announcement. This is the first time I'm starting to do it. But what I love is hearing from all of you on the podcast and so much has come in from the last podcast as well. From the last episode on the daily routines, I used to rewire my subconscious for abundance and like financial prosperity. If haven't listened to that yet, tap into it. Cause it is a bumper episode.

So many of you have written in email, me DMD me like all the things. Um, I've honestly been blown away. Thank you so much. I love hearing from my podcast listeners and side note, yes. The subliminal audio is being created because there've been so many of you that, that have asked for it. But what I'm also doing is announcing prize winners for, um, podcast reviews. So what I would love for you to do is spread the message and to do that is, and to help me and to help me get more exposure on Apple iTunes over, have you listened to it is to write a review, um, on the podcast so that I can share it. And so all you need to do to be into the monthly prize is to write a review and then send me a screenshot of it. Um, however you like, you can send it to hello at ms. wealthy.com, send it on Facebook, send it on Instagram, whatever you like, and then I'll pop you into the prize for, to be the winner for that month for the podcast review. All right, babe. Thank you so much for tuning in. I'll see you next week.