Warren Buffett is one of the most prestigious investors in the United States, with a net worth of $147.6 billion. His wealth didn’t fall in his lap. Instead, he worked diligently and passionately toward building wealth from an early age.
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There are countless wealth-building lessons that can be taken from Warren Buffett, one of which is looking poor.
Changing Your Outlook on Wealth
Despite his massive fortune, Warren Buffett doesn’t flaunt his money. To him, money has little utility in terms of luxury items.
Instead, he finds joy in experiences and relationships. Buffett sees wealth as a way to cultivate well-being and personal growth. Living a fulfilling life relies on balancing wealth and personal happiness.
Changing your outlook on wealth from spending to impress others to using your money to create a fulfilling life is a crucial component of becoming wealthier. These mindset changes can lead to humility, financial discipline, higher savings rates, and smart investment decisions. Altering your mindset also improves Warren Buffett’s top principle: Frugality.
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The Secret Ingredient: Frugality
Buffett believes that the desire to impress others can lead to poor investments. Instead of trying to maintain a specific social status, focus on investing for the future.
You undermine your financial stability when you need to keep up with appearances. Not only can your wealth take a hit, but living outside your means can also lead to unwanted attention and increase your risk of theft and exploitation.
Frugality involves spending in alignment with your long-term goals and current situation. While those with less see money as a means to survive, the middle class often associates money with lifestyle maintenance.
As your wealth grows, your lifestyle should remain relatively consistent, with spending to grow your financial resources, not flaunting your money. Although looking poor is often associated with a lower social status, it is a key accelerant to becoming wealthier.
Strategies for Looking Poor
Looking poor doesn’t mean you dress in clothes with holes or live in the worst neighborhood in your city. Instead, looking poor means you prioritize modesty.
Instead of focusing on a flashy new car or the latest fashion trends, you prioritize what truly matters: Your long-term wealth. Strategies for looking poor can take on many different forms, especially depending on your goals.
For some, looking poor might mean using coupons while grocery shopping or buying clothes at a thrift store. For others, looking poor might mean spending their free time volunteering instead of going to a fancy restaurant on a Friday night.
Finding what drives you is important. Sustainable growth and modesty are easier when your motivation aligns with your passion.
The Bottom Line
Looking poor can help you become wealthier. Having a frugal mindset allows you to avoid lifestyle creep, prevents you from exploitation and theft, keeps you grounded in what truly matters, and gives you the momentum to build long-term wealth. What changes can you make to your life and investing journey to become wealthy like Warren Buffett?
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This article originally appeared on GOBankingRates.com: Warren Buffett: How Looking Poor Can Help You Become Wealthier
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