9 Tips for Rock-Solid Financial Health From the World's Richest People
While being rich may not automatically make you healthy, there's definitely something to be said for alleviating some of the stress that comes from financial woes. Here are some words of wisdom to help you along the path to financial health.
Let’s face it: Very few people end up as billionaires or even millionaires. But, that doesn’t mean the average Joe or Jane can’t take financial advice from those who did. Being financially healthy may also have an impact on your physical health. In fact, a 2014 study from the journal Psychological Science found a connection between 401(k) contributions and other healthy lifestyle changes.
So while being rich may not automatically make you healthier, there’s definitely something to be said for alleviating some of the stress that comes from financial woes. Here are some words of wisdom to help you along the path to financial health.
1. Warren Buffet: Invest in Yourself
Business magnate Warren Buffett knows that no one can get rich without making an investment in a key player: yourself 17. Think about where your weaknesses lie, and then do something about them. In a self-penned editorial piece for Forbes, Buffett admitted that he, like so many others, suffered from a fear of public speaking. He invested $100 in a public speaking course, which helped him get over his fear and take his career to the next level. This investment might be something as big as getting a college degree. It might be as small as buying a new suit that makes you feel confident. What matters is that the money goes to something that will help you succeed.
2. Carlos Slim Helu: Start Early
It’s never too early (or too late) to start making good financial decisions. No matter your age (and even if you haven’t invested much before), Mexican businessman Carlos Slim Helu — who’s traded places with Bill Gates at the top of the list of richest people in the world once or twice — recommends starting now 2. Even if you’re not able to invest much, something right now is better than planning to invest a lot more later (and potentially not following through). And Slim practices what he preaches: He bought shares in a Mexican bank when he was just 12 years old!
3. Kyle Taylor: Follow the 50-30-20 Rule
Self-made millionaire Kyle Taylor, founder of the personal finance website The Penny Hoarder, offered up advice for dealing with unexpected money, such as an inheritance or a bonus. He calls it the “50-30-20 percent rule,” in which 50 percent of that money goes into a long-term savings account or an emergency fund 4. Then 30 percent goes toward funding your lifestyle, and the remaining 20 percent is reserved for something fun, like a vacation or a “treat yo’self” purchase. It is responsible to save the majority of the money, but that division of cash allows you to feel like you get a little something out of it. Because what good is money if it can’t buy you a little fun from time to time?
4. Bill Gates: Measure Your Progress
Every once in a while, take stock of where you are in your career and in reaching your financial goals. In an annual letter from the Bill and Melinda Gates Foundation in 2013, Bill Gates wrote, “You can achieve amazing progress if you set a clear goal and find a measure that will drive progress toward that goal.” Keep good financial records that measure year-to-year growth in your investments, salary, bonuses, commissions and other sources of income 5.
5. Grant Cardone: Diversify Your Income
Best-selling author and entrepreneur Grant Cardone suggests that you can only get rich if you have more than one flow of income. However, that doesn’t mean you should open up a restaurant while also launching an advertising firm. The sources should be what Cardone calls “symbiotic flows.” If you have that advertising firm, diversify your client base so you have checks coming from various sources. Branch out from print to digital advertising. Add a graphic design department. These sources of income are related, but they offer multiple opportunities for revenue.
6. Mark Zuckerburg: Take Calculated Investment Risks
One of the youngest billionaires on the list of the world’s richest people and the CEO and founder of Facebook, Mark Zuckerburg has the luxury of taking a few risks when it comes to investments. He recommends looking into volatile, high-growth stocks as well as doing research in emerging markets to find new investments 6. However, general wisdom says that those who are younger can safely take more risk (see No. 2) — whether in retirement accounts or other investments — than those who are closer to retirement age.
7. Warren Buffet: Learn When to Play It Safe
Billionaire Warren Buffett, who is a bit more advanced in age than Zuckerburg, knows the importance of focusing on the fundamentals of investing. He recommends looking for investments in companies that have a strong annual cash flow as well as those that don’t run the risk of becoming technically obsolete 17. Buffett also advises against diversification when investing, but rather waiting for opportunities to buy good stocks and then go all-in (relatively speaking). Don’t pay attention to every headline you see to avoid overreacting when bad news comes along.
8. Azim Premji: Live a Simpler Life
Some of the richest people in the world choose to upgrade to sprawling mansions and fancy cars as soon as they have the money. However, billionaire Warren Buffett — who remains living in his five-bedroom home that he bought for $31,500 in 1957 — was quoted saying, “Toys are a pain in the neck” (likely due in part to the expensive upkeep required) 3.
Likewise, Jim Walton, the son of Walmart founder Sam Walton, reportedly drives a 15-year-old pickup truck, and Indian business tycoon Azim Premji drove a Toyota Corolla before upgrading to Mercedes Benz E-Class — that he bought used 38. The lesson from these men: Sometimes you don’t need to flaunt your wealth through real estate and automobiles.
Read more: 10 Ways to Downsize Your Life
What Do YOU Think?
How’s your financial health? What are you doing to keep your personal finances in check? Did you know that financial health is connected to physical health? Do you listen to any of these millionaires or billionaires for financial advice 4? Are there other sources you trust? Share your thoughts, suggestions and questions in the comments below!
- Forbes: Warren Buffett: My Greatest Investing Advice And The Investments Everyone Should Make
- Intuit Mint: Personal Finance Tips from Billionaires
- Investopedia: 6 Spending Tips From Frugal Billionaires
- CNBC: The 8 best pieces of money advice we heard from self-made millionaires and billionaires in 2017
- Go Banking Rates: Things Bill Gates Says You Should Do With Your Money
- Investor Place: How Mark Zuckerberg Teaches Us to Be Better Investors
- Business Insider: Warren Buffett's best investing advice for beginners
- Live Mint: What makes Azim Premji a happy man?