Warren Buffett is constantly listed as one of the world’s richest people, with an estimated net worth of about $112 billion. But unlike his good pal Bill Gates, Buffett doesn’t live in a sprawling $100 million lakeside home.
No, the 92-year-old chairman and CEO of Berkshire Hathaway doesn’t exactly live like a Kardashian — although he could afford to do so. Instead, it is quite the opposite: Buffett even once had a vanity license plate that read “THRIFTY,” and that license plate wasn’t lying.
Even those of us whose personal fortunes will never reach $1 billion, much less $100 billion, can take a few lessons from Buffett’s relatively frugal lifestyle. Here are some valuable tips from the Oracle of Omaha’s prudent money habits.
1. Buy a modest home
Buffett and his late first wife, Susan, bought their Omaha home in 1958 for $31,500. It’s not tiny — there are five bedrooms and 2.5 bathrooms — but he didn’t replace it with a mega-mansion once the money started rolling in. (Let’s be honest, though — he also did buy a vacation home in Laguna Beach, California, spending $150,000 for it in 1971.)
For Buffett, Omaha and the relatively modest house he chose back in the 1950s have always been home sweet home.
2. Don’t be afraid to use coupons in front of friends
Coupons save you money, so why not use them? Bill Gates marveled in a 2017 letter about what he saw when he was once at a McDonald’s in Hong Kong with Buffett.
“You offered to pay, dug into your pocket, and pulled out … coupons!” Gates wrote, noting that his wife, Melinda, even took a photo of Buffett and his coupons. “It reminded us how much you value a good deal.”
3. Don’t smoke or drink
Both smoking and drinking require steady outlays of cash, and neither is healthy for you, which could mean increased medical bills down the road.
Buffett has never smoked or drunk alcohol, and he’s still with us at 92.
4. Look for sales and deals
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down,” Buffett wrote in Berkshire Hathaway’s 2008 letter to shareholders.
There’s no need for Buffett to ever jump on a marked-down item, yet he knows the value of a deal.
5. Don’t gamble
What’s that saying about gambling? “The house always wins.”
Buffett knows this, and he’s said that “gambling is a tax on ignorance.” He once bought a slot machine for his home and paid his kids their allowance in dimes, knowing they couldn’t resist the lure of the slots and he’d have their allowance all back that same day.
They learned what Buffett, and smart investors, already know — gambling doesn’t pay.
6. Don’t upgrade possessions unless you have to
Buffett famously used a Nokia flip phone for years, although he’s since moved on to an iPhone. But his phone ownership history reveals a truth: Buffett’s not all about paying big money for the latest and greatest tech.
“I don’t throw anything away until I’ve had it 20 or 25 years,” Buffett told Piers Morgan in 2013. (Buffett also showed off a 20-year-old wallet.)
7. Forget fancy food
Buffett could eat gold-plated lobster for every meal, even though that sounds horrible. But his eating habits are modest (if not super healthy).
“I don’t like a $100 meal as well as a hamburger from McDonald’s,” Buffett told People magazine in 2017. His daughter told People that Buffett regularly treats his grandchildren and great-grandchildren to monthly lunches, but not at five-star steakhouses. They go to a (Berkshire-owned) Dairy Queen.
8. Don’t waste money on a lavish wedding
It’s easy for an engaged couple to spend thousands upon thousands of dollars on a fancy wedding. That’s not for Buffett. When he and his second wife, Astrid Menks, wed in 2006, it was in a brief civil ceremony at Buffett’s daughter’s house.
The ceremony took 15 minutes, followed by dinner at a casual seafood restaurant, The New York Times reported.
Buffett’s daughter helped her dad pick out his new wife’s ring at an Omaha jewelry store owned by Berkshire Hathaway. Asked if Buffett received the employee discount on the purchase, his daughter told the Times, “I’m sure he did.”
9. Drive the same car for years
It’s not that Buffett drives the cheapest set of wheels, mind you. In 2014, he spoke to Forbes about his choice of a Cadillac XTS luxury sedan. But he doesn’t change his car as often as someone with his bank account certainly could.
Buffett admitted he’s seldom in the market for a new vehicle, saying, “The truth is, I only drive about 3,500 miles a year so I will buy a new car very infrequently.”
10. Pick inexpensive hobbies
One of Buffett’s favorite hobbies is playing bridge, which requires only a deck of cards and some like-minded friends. Buffett doesn’t even care where those friends come from, having once said, ”If I ever go to jail, I’d want my cellmates to be bridge players.”
11. Give from the heart
Buffett could lavish his pals with pricey gifts, but he chooses to deliver gifts of time, not money.
His billionaire pal Bill Gates wrote on his blog, GatesNotes, that Buffett is the kind of friend everyone wishes they could be. And his gestures are thoughtful and inexpensive — picking Gates up at the Omaha airport personally, sending him articles he knows will be of interest and just picking up the phone to call and chat.
12. Realize the danger of too much stuff
“Too often, a vast collection of possessions ends up possessing its owner,” Buffett said in his Giving Pledge, in which he promised to donate more than 99% of his wealth to philanthropic causes.
You won’t find Buffett obsessing over enormous collections of homes or cars, though he surely could. “The asset I most value, aside from health, is interesting, diverse, and long-standing friends,” he said.
13. Forget fancy clothing
Buffett owns close to 20 business suits, but it’s not because he’s a clotheshorse.
He told CNBC that he once met a businesswoman in China, Madam Lee, who measured him for a single suit and has sent him new ones ever since. Buffett says that were it not for Madam Lee, he’d probably own fewer than five suits, and they’d likely be more than 10 years old.
14. Don’t spoil your kids with material things
Buffett’s daughter, Susan, says her parents gave their kids a normal upbringing, not the silver-spoon millionaire lifestyle depicted in Richie Rich comics.
“We lived in a nice house but certainly not the biggest house in town,” she told People magazine. “We went to public schools. We didn’t get cars when we turned 16. We got an allowance, and we had jobs we had to do around the house.”