X
Want to receive money management tips in your inbox? Subscribe below!

Don't Forget The Big Picture

October 12, 2018

Several years ago I managed the medical practice of two physicians. They were great guys who paid me generously, appreciated my organization, and brought in books for me to read when it was slow. Favorite books included Born to Run, the autobiography of Peter Peterson, and a collection of letters to shareholders by Warren Buffett. I found Mr. Buffett’s writing style very approachable and his principles mostly followable:)

Recently, I came across another Buffett book, Warren Buffett’s Ground Rules. This book featuring snippets of his letters along with commentary by the author is really great. I didn’t crack it until late July and when the August 1 due date came, I chose to keep it and pay the late fines. It’s that good! It made me think about the following.

Focus on the long-term

As you know, I’ve paid off a lot of debt and my main platform is encouraging people to get out of the hole of debt and bad spending. Investing is not something I talk about or pretend to help people with. The main reason is that I feel for the people who are mired in debt and are just getting by and find tremendous satisfaction in just helping people get to a positive net worth. But getting reacquainted with the principles of Warren Buffet has made me realize something.

Sometimes I think, write, and talk so much about realistic budgeting, debt, and better spending that I forget about the bigger picture. The goal is not to just have a balanced budget each month, paying the bills, and enjoying some luxuries. The goal is to get money literally working for you (via smart saving and investing) so that it brings in future income.

The point of this post is not to educate any of us about sound investing principles. It’s just a reminder for all of us to think bigger and look further down the road. One snippet of the book I’m reading says that Warren Buffett balks at a $10 hair cut because that money invested in his portfolio would be worth millions one day. It might be a somewhat facetious story, but the principle is thought-provoking. Not only is something you spend money on not something else, but it’s also not what it might have grown to be had the money been invested instead.

A life built around meaning

I was talking with a close friend recently about our 10-year plans. His plan was really motivating. Instead of planning a life built around his comfort and pleasure, he has plans to own clinics so that he can provide employment for dozens of people, and have the corresponding wealth to do things like start scholarship programs and contribute to non-profit clinics. Because I know this guy, I know that he will be investing money in traditional ways (i.e. stock market) but I love that he has a plan for the impact he wants to make on the world and his future communities.

Takeaway

So what does your long-term plan look like? Does any of this make you inclined to get out of debt faster and master your spending habits? It sure has motivated me to up the income, be even more intentional with spending, invest my excess, and make a plan for the mark I want to make on the world. And reading about Warren Buffett has also encouraged me to eat more Oreos. Read on for a totally unrelated anecdote I came across which has perhaps unintentionally empowered me to eat “Milk’s Favorite Cookie” for breakfast like my wealthiest friend:)

When it comes to food, the billionaire investor has been known to save money by taking the fast food route. In fact, he might kick off his day with a trip to McDonald’s during his five-minute drive to work, reports CNBC.
If he’s feeling prosperous, he’ll splurge by spending $3.17 on a bacon, egg and cheese biscuit sandwich. If the market’s down, he might spend $2.95 on a sausage, egg and cheese sandwich instead. On a really bad day, he buys two sausage patties for $2.61, puts them together and washes it down with a Coke.
Buffett is also known to eat cheap when he’s on the road. But forget the cholesterol-soaked bacon and eggs at a local restaurant. Buffett’s travel breakfast might consist of a pack of Oreos, his friend Bill Gates — yes, his good buddy is the Microsoft founder — wrote on his blog.
“One thing that was surprising to learn about Warren is that he has basically stuck to eating what he liked when he was 6 years old,” wrote Gates. “He did move past baby food, of course, but he mostly eats hamburgers, ice cream and Coke.”
Buffett explained his bizarre but cheap diet in an interview with Fortune: “I checked the actuarial tables, and the lowest death rate is among 6-year-olds. So I decided to eat like a 6-year-old. It’s the safest course I can take.”