How to retire like Warren Buffet!
I’m sure we can agree that Warren Buffet is one of the best investor and business owners we’ve seen! There are always articles out about his tips and strategies for investing, so why not apply the same ideas to your retirement plan? Maybe you’ll get just as fortunate as he is with success!
Here are his 3 Top Tips for Investing from the following article: https://www.yahoo.com/finance/news/3-investing-tips-warren-buffett-103200512.html
Buy stocks the same way you’d buy an entire business.
Look for an enduring “moat.” Or protection for your investment.
Avoid buying and selling too frequently.
Let’s start with #1, buying stocks the way you’d buy an entire business. This comes down to thinking through all of your purchases. If you don’t like vacationing somewhere then you probably won’t want to live there year round. With any retirement decision, it’s so important to think through the ramifications of it, what it is costing you in time and money, and will it pay off long term. I always recommend renting if you want to move to a new place, it’s a great way to get an idea of where you want to live, what area of town, and if you even like it. When you’re about to buy a car, would you rather get a luxury car or have that extra money for a trip? It’s always a trade off in retirement because you are on a fixed income. Are you going to throw away money on stuff that doesn’t mean much to you or would you rather be more precise with your spending? The more clear you are with your goals and values, the easier it is to spend your money where it matters. You can spend just as much money, but get so much more fulfillment out of it. Once you understand what is important in your life and create a plan, you’ll be more focused on your spending and savings. You’ll stop wasting money on stuff that doesn’t matter and enjoy what does. Think through your purchases with these four questions:
Do I need this item?
Did I need it yesterday?
Will it get me closer or farther from my goals?
What else could I be doing with my money?
Warren Buffet has four questions he asks before every stock purchase, so why not use his methodology for your benefit too?
The second tip deals with protection, there are several ways to use protection in retirement. You can protect your loved ones with life insurance, protect your nest egg with long term care insurance, and protect your health care costs with health insurance. When you have a plan in place, it becomes easier to identify which ones you need to fulfill your retirement wishes. Build your RETIREMENT WISHLIST HERE! Life insurance can be a great way to insure your spouse has enough money to maintain the lifestyle you want for them. It can also be a way to continue your legacy by donating to charity, giving money to your children and grandchildren, or make sure your spouse is taken care of. Long term care insurance can help pay for the very expensive nursing home bills if you need extra care down the road. By helping to cover the costly bills, your able to leave more of your assets to your spouse and children so you are also covering your legacy wishes. Just like during your working days, you bought disability insurance to protect your greatest asset: your income, long term care insurance is there to protect your new greatest asset: your nest egg. And I hope you know you’ll need health insurance and Medicare during retirement for our health care costs! You wouldn’t be silly enough to try to go through retirement with no health insurance! Right?
The last tip I really love! Some people will make so many changes to their plans that no one has any idea of what to strategize for. Your retirement plan will get changed, modified, or tweaked along the way, but if you’re always giving up or completely throwing the plan out the window, you’ll get no where fast! Stick with a plan for an extended period of time and see if it’s really for you or not. Don’t get caught up the need to always make changes because you’ll end up never taking action. A lot of people will do this and in the end become paralyzed because they can’t make a decision. They’ll look at every scenario possible, but they are just procrastinating. Get a plan in place so you’ll take action! Need help? Check out our Retirement Guide to Retiring with Security and FREEDOM!
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