American investor Warren Buffett says “paying yourself first” is a surefire way to build financial stability throughout your life.
The advice pertains largely to those in the middle class, who Buffett says should put savings and investments above all else. The philanthropist, known for his financial lessons geared toward the middle class, promotes living a simple lifestyle, so your wealth is spread throughout every phase of your life.
The phrase “pay yourself first” refers to a personal investment in one’s future.
“Do not save what is left after spending, but spend what is left after saving,” he said during one of Berkshire Hathaway’s — a conglomerate holding company of which he is chair — annual meetings.
Mastering the habit will secure a foundation for financial freedom, he said.
Another piece of advice from Buffett: avoid collecting consumer debt.
Sometimes it’s hard to avoid taking on debt with the vast number of credit card companies. Therefore, the philanthropist says he always tries to pay with cash, warning that unnecessary borrowing can be detrimental to one’s financial health.
There’s more to personal investment than saving money. Developing skills, garnering knowledge, and growing as a person overall will deliver the greatest return of all time, Buffett says, because no one can take it away.
