The Money Advice Each Generation Should Learn From Warren Buffett
Written by
Cindy Lamothe
Edited by
Amber Barkley
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Warren Buffett is one of those household names everyone associates with money. And for good reason — the billionaire has built a legacy around his profound financial insights.
“My forte is empowering families with financial literacy, and who better to learn financial literacy from than Warren Buffett?” said Anna Yen, CFA, money expert and author at MoneyLion.
Luckily, there is something to be learned from Buffett at any age. Below is the money advice each generation would be wise to learn from Warren Buffett.
Baby Boomers
This generation, born between 1946 and 1964, is either into full retirement or in the process of entering the retirement stage in life.
Therefore, the focus, Yen explained, should be on retirement planning and ensuring they’ll have a stable income in their golden years.
“So, [Buffett’s] best advice is to invest your hard-earned money in a diversified portfolio,” Yen said. “Please avoid unnecessary debt to maintain financial security.”
Generation X
This middle-aged generation, born between 1965 and 1980, has not yet entered the retirement stage, said Yen.
“However, that does not mean they should take things for granted,” she explained. “They should start building their retirement corpus at an early age and take advantage of compound interest. Balancing risk is essential.”
Therefore, she said this generation should also follow Buffett’s advice to diversify their investments across different classes. He recommends low-cost S&P 500 index funds for most investors.
Millennials
This younger generation — born 1981 to 1996 — is at the right stage to start investing, Yen said. “They are either in their initial employment years or peaking in their careers. So, Warren Buffett’s mantra would be to save and invest early, even if it is for small amounts.”
She said this generation should understand the difference between being frugal and miserly. “Being frugal is where you can enjoy the best things in life without having to compromise on anything.”
At the same time, Yen noted saving and investing money for the future is also crucial. “Therefore, Warren Buffett would advise this generation to prioritize financial literacy to make informed investment decisions. This generation is best placed to understand and benefit from the power of compounding.”
Generation Z (1997 to 2012)
According to Yen, this generation comprises those born 1997 to 2012 who are on the cusp of entering the most fruitful phase of their lives. At the same time, she explained it has individuals who are in the ideal position to chart their future career.
“Warren Buffett would advise Gen Z to focus on building a strong financial foundation with disciplined saving and investment habits,” she said. “Gen Z is advantaged because they have grown with technology. So, leveraging technology and staying informed about financial markets is crucial to making educated decisions.”
Generation Alpha
Gen Alpha, born 2013 to 2024, are just beginning their financial journeys.
“Warren Buffett would advise this generation to focus on their education,” said Yen. “They must learn the basics of money management, saving and investing.”
She noted that things learned early in life stay with you the longest. “Besides, developing patience is crucial, as you need it to learn to value long-term growth over instant gratification.”
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