Not only do we often receive questions on how to invest in order to be able to retire early, many books have been written on the topic, says Pieter Willem Moolman.
As a society we are always on the lookout for ways to make a quick buck to this end, but, unfortunately, the serious and responsible answer to these questions remains “saving”.
The good news is that the principles of saving are not rocket science and it can be enlightening how basic these often are.
A while ago an e-mail did the rounds about interesting aspects of the life of Warren Buffet, the world’s second richest man. I usually delete such mails, but this one got stuck in my inbox because of the sound principles of saving that it captured.
Although some of our readers may have seen it, I would like to revisit some of its contents.
Buffet bought his first share at the age of 11 and now regrets having started so late! The lesson here is to encourage your children to invest and save from as early as possible.
He still lives in the same three-bedroom house that he bought after he got married 50 years ago. The principle here is not to spend money on things you don’t really need.
Unlike many of his contemporaries, he drives his own car and is not surrounded by security people. Buffet says you are what you are.
Although he owns the world’s largest private jet company, he never travels by private jet. He says you must always think how you can accomplish things economically.
His holding company owns 63 companies, but, apart from one letter a year in which he gives the CEOs their goals, he never holds meetings with or phones them. The moral of the story here is to assign the right people to the right jobs.
Buffet says it is important to set goals and to make sure people focus on them. In line with this, he has given his CEOs only two rules: do not lose any of your shareholders’ money and, secondly, do not forget rule number one.
Instead of socialising with high society, his pastime of choice is to watch television with a bowl of popcorn. Don’t try to show off is the lesson here. Be yourself and do what you enjoy doing.
His advice to young people is to live their lives as simple as possible. Don’t do what others say – listen to them, but do what you feel good doing.
Furthermore he advises youngsters to steer clear of brand names and to simply wear the things in which they feel comfortable.
The happiest people, says Buffet, do not necessarily have the best things; they simply appreciate the things they have.
Pieter Willem Moolman is the owner of PWM Financial Management in Port Elizabeth. Visit www.pwmfb.co.za or phone 041 582 3034.