Most effective piece of financial advice

 

  1. Buy assets, not liabilities.
    • Buy things that make money for you: stocks, real estate. Don’t buy things that don’t make money: clothing, fancy cars, etc.
  2. Don’t buy assets you don’t understand.
    • When your friends at the bank try to sell you a complicated financial instrument that you don’t understand, chances are it’s a bad apple.
  3. Make more money, not save more money.
    • No one increases their net worth by saving. They increase by making more money.
  4. People who look rich are poor. People who look poor are rich.
    • People who drive fancy cars and flaunt their supposed wealth are probably not that wealthy.

“I never invest in anything that I don’t understand” – Warren Buffett

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