In this time of economic slowdown amidst the global financial crisis, financial guru Warren Buffet shares some views and wisdom which he uses to stay financially healthy. Let’s learn a thing or two from this world reknowned investor and grow healthier and wiser financially from here on too.

Warren Buffet

We begin this New Year with dampened enthusiasm and dented optimism.  Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations.   Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health.  Every new year, I adopt a couple of old maxims as my beacons to guide my future.   This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older.   This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.

Hard work: All hard work brings profit; but mere talk leads only to poverty.
Laziness: Sleeping lobster is carried away by the water current.
Earnings: Never depend on a single source of income.
Spending: If you buy things you don’t need, you’ll soon sell things you need.
Savings: Don’t save what is left after spending; spend what is left after saving.
Accounting: It’s no use carrying an umbrella, if your shoes are leaking.
Auditing: Beware of little expenses; a small leak can sink a large ship.
Risk-taking: Never test the depth of the river with both feet.
Investment: Don’t put all your eggs in one basket.

I’m certain that those who have already been practicing these principles remain financially healthy.
I’m equally confident that those who resolve to start practicing these principles will quickly regain their financial health.  Let us become wiser and lead a happy, healthy, prosperous and peaceful life.
Warren Buffet

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Words of wisdom from financial guru Warren Buffet

The habit of saving money is always looked upon as something so simple yet never easy to do for most people. It takes a lot of discipline to save up regularly. It takes even more discipline to save for the future or a rainy day, as compared to saving up for a purchase of something of desire. Saving is actually not too difficult anymore in this day and age where technology has given us much convenience to do so. Here are some saving tips to share. It is all about making up your mind to do so, spend some time and effort to set things up once and for all, and you will be on your way to making regular monthly savings.

Assuming you are under employment and have a bank account where your monthly salary is automatically debited with your pay cheque, it is suggested that you set up another account for your savings to go into. A savings account is recommended for this purpose for 2 good reasons. Firstly, most savings accounts do not impose as high charges as current or checking accounts do. Secondly, savings accounts tend to give better savings interest rates compared to current accounts. You can opt whether or not you want this newly set up account to come with an ATM card. The pro of not having an ATM card is that it makes it inconvenient for you to withdraw the funds, and you are more likely to leave your savings intact for the long term. Even if you have an ATM card to your savings account, avoid withdrawing funds from it anyway.

From the bank account where you normally receive your regular salaries, instruct an auto-debit on a monthly basis to be transferred to the savings account that you have set up. This is a one-time set up on your side provided you select the recurring option and it is suggested that you set it on a monthly basis. As for the amount to be auto-debited to your savings account, it is entirely your choice. Set a certain percentage of your net income to be your savings, say 10% to start with. A note to add on this point is that you should set the date of the auto-debit to be just after you have received your salary. Salaries are normally paid on a certain date in the month, and you should take the savings portion out before you start making payments for your other loan commitments or any other expenses. The idea is that you should pay yourself first once you have received your pay cheque, and not the banks.

Once you have done this, saving money becomes automatic, hence the auto-pilot mode. It is as easy as A,B,C! You just need to put your mind to doing this, and be disciplined enough not to cancel that monthly auto-debit.

If you would rather prefer to put your cash savings into an investment vehicle instead, you can do this via regular or monthly purchase into unit trust funds or even units in shares. Again, these purchases can be done via auto-debits. You should speak with your unit trust agent or remisier about your options and how to go about investing regularly. For both these vehicles, you do not need to purchase units by the thousands if it is a recurring purchase. You can opt to buy units in the hundreds. That way, these investments become very affordable and over time, you will find yourself having significant holding of certain unit trust funds and stocks.

Save reguarly, and save wisely. It is a worthwhile exercise over the long term. Putting off a certain portion of your monthly salary will not make you much poorer month on month. But you will be surprised how much it can grow over the years, especially if you take into account the magic of compounded interests earned, or the growth of good funds and stocks.

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How to save money regularly and do it on auto-pilot mode