Warren Buffett’s Money Tips to Master Before Your 40s

We should all be as successful and prosperous as Warren Buffett. At around $66 billion, his net worth seems to get larger and larger as time passes — which is no surprise considering his keen foresight and savvy money strategies have made him one of the most successful investors of all time.

But take all of the financial situations everyone faces on a daily and monthly basis — budgeting for a new house or car, student loan debt or college savings — and it’s hard for most of us to sock away six, let alone seven, figures in the bank. You can, however, still strive to be like the Oracle of Omaha by listening to some of his most sage wisdom.

Whether it’s retirement planning tips, investment advice or better financial awareness you’re after, these 10 Warren Buffett money tips are skills you need to master before you turn 40.

1. Start saving money now.

Or, in a few enigmatic words from Buffett, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

warren buffett quotes

It’s a struggle to get anywhere without starting somewhere — and it’s never too late to begin developing a savings plan, even if it’s opening a standard savings account. Buffett had to start somewhere in his financial journey, too. Look at it as “paying yourself first,” and make it a priority to save money now.

2. See the value in frugal spending.

“Price is what you pay; value is what you get.” Buffett said Ben Graham taught him this, and the notoriously frugal Buffett is living proof of this.

Just like excessive credit usage, overspending on disposable items you don’t need can leave you broke. And many everyday items, like grocery and household purchases, aren’t worth their marked-up price tags.

Don’t assume you’ve got to be obsessive each time you buy something. Instead, always look for coupons, promo codes, sales and deals. Also, try to choose generic vs. brand-name items in the store. Compare their ingredients, and you’ll likely find that the generic brand is the same product but cheaper.

Related: 7 Unbelievable Ways Warren Buffett Lives Frugally

3. Big picture goals take time to reach.

In one of his more absurd analogies, Buffett said, “No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

Just because you’re almost 40, that doesn’t mean you’re expected to have a big house, two to three luxury cars and millions of dollars in the bank. But, you can build a stable nest egg by setting reachable, long-term goals and understanding that wealth takes time to establish. Determine how much you’ll need to live on during retirement, and work toward reaching that number in the next couple of decades.

This is also the time to start a financial relationship with an investment adviser to plot out the right portfolio for your needs. By combining smart moves with a realistic time frame, financial security is possible.

4. Learn from past financial mistakes.

Hindsight is always 20/20 — or in Buffett speak, “the rearview mirror is always clearer than the windshield.”

There’s more to learn from past bad money mistakes than from new ones. Take the time to ask yourself: Do I have a tendency to overspend and go into debt? Have I relied too much on credit? Do I not use enough credit?

warren buffett money tips

By age 40, you’ve got enough life experience to understand what you’ve ignored and the personal finance missteps you’ve taken. Gain some awareness now, since old money habits are harder to break the older we get.

5. Limit how much you borrow.

“I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” said Buffett. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.”

Smart money management and disciplined spending mean you don’t need to rely so much on credit cards and loans. Don’t rule out credit completely, though. Sensibly borrowing money and repaying your balance back in full each month keeps your credit score high and increases your chances of getting approved for low-interest loans.

6. It’s OK to take some financial risks.

No risk, no reward … but what exactly is risk? “Risk comes from not knowing what you’re doing,” said Buffett, according to Forbes.

People unacquainted with investing might look at the stock market as too big of a risk to take. That’s a myth. Buffett would acknowledge that if you’d like to start expanding your portfolio beyond savings or retirement accounts, begin learning the ABCs of investing. Once you’ve got some knowledge, you can take the steps to invest wisely.

Related: 7 Investing Mistakes Warren Buffett Regrets

7. Pay off your debt.

Buffett is one of the few people who can make sense of a complex subject, like debt, through one of his folksy axioms.

“The most important thing to do when you find yourself in a hole is to stop digging,” he once told his Berkshire Hathaway shareholders 25 years ago in a chairman’s letter.

If you’ve been carrying debt in our 20s and 30s, make the commitment to erase it before you enter your 40s. Try negotiating with your creditors and start tucking away money you can use toward your loan payments.

8. Don’t try to keep up with the Joneses.

When the neighbors just bought a nice new car or vacation home or a friend is thriving financially and professionally, a “keeping up with the Joneses” mentality might set in near middle age. It’s like a financial inferiority complex that can cause damage to your money and your mindset.

quotes by warren buffett

But Buffett said to forget about those people: “Live your life by an inner scorecard.”  Stop comparing yourself to others, and your goals will be easier to accomplish.

9. Money won’t buy happiness.

According to Buffett, money is one of the least important things in life.

“Some material things make my life more enjoyable; many, however, would not,” he said. “I like having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”

You shouldn’t spend your whole life worrying about money. If you haven’t learned this by now, you need to start realizing it before you enter your 40s.

10. Don’t listen to Warren Buffett.

Just as it’s important to stop comparing your financial achievements to others, Buffett will be the first to caution that you shouldn’t be swayed or wooed by the advice from any of the 10 million “experts” who think they know your money better than you do — and that goes for Buffett, too.

“Anything can happen anytime in markets,” he once wrote. “And no advisor, economist, or TV commentator — and definitely not Charlie nor I — can tell you when chaos will occur. Market forecasters will fill your ear but will never fill your wallet.”

Keep reading: 10 Ways to Start Planning for Retirement in Your 40s