How to get rich – advice from Warren Buffett

(Newshub.)
(Newshub.)

Warren Buffett is one of the world's richest men and most successful investors. He's often asked for his advice on growing rich -- and he's been happy to offer tips in his speeches, investor letters and in biographies like Alice Shrooeder's The Snowball.

You won't find him offering any tips on getting rich quickly. But he will offer advice on how to get rich slowly.

His advice might be simpler than you think. There are no great secrets. But for many people the hard part will be putting his advice into practise.

The sooner you start saving the better. But every little bit helps. No matter how old you are. The trouble when you start saving is that the amounts seem quite small.

That is where compound interest kicks in. It is slow at first but after five years, and especially after ten years, the money really starts to grow. But you need to stick with it through those first few years when the savings might not seem so big.

If you own shares or have money in an investment fund you might be tempted to spend the dividends. Don't do that. Leave that money there and let it compound over time.

Buffett's not a big fan of debt, especially credit card debt. The trouble is a little debt can turn into a lot of debt if you are not careful.

Just because your friends and everyone else say they are investing in something that does not mean you have to do so as well. The odds are by the time everyone is talking about the latest hot investment its price is already peaking.

That sounds obvious but what he means is be careful about risk. Don't be tempted to risk something you need to get something you want.

Watch the video.

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