Here at GNN Money, Gerbil News Network's finance page, we strive to bring you the best free money advice from around the internet. Other so-called "experts" give you raw, undigested data from "deep dives" into minutes of Federal Reserve meetings, unemployment statistics and prices of pork bellies, but we can't hold our breath that long, and who wants to dive into a pig's stomach anyway? Instead, we "cut to the chase" by aggregating stuff we find on the World Wide Web after several minutes of in-depth research.
Buffett: "You have money to invest? I doubt it."
Today's financial insight is ripped from the webpages of gobankingrates.com, which helpfully collected the 10 Genius Things Warren Buffett Says to Do With Your Money. Other blogs may "upcharge" you for sophisticated financial advice, but we maintain our independence by relying solely on the three-figure checks (two to the right of the decimal point!) we receive each month from banner ads.
Here, for those who have not yet achieved Buffett's stratospheric $121.5 billion net worth, are six bangers from the man known as the "Oracle of Omaha" for his investing savvy:
1. Never Lose Money. You'd think this would be obvious, but apparently it's not. Some people go around buying shares of stock whose price drops, often precipitously. JUST STOP IT! Put your money into investments that never decline in price, like baseball cards, Star Wars commemorative drink cups, and cocoa futures. My Chewbacca beer mug is priced to sell!
2. Get High Value at a Low Price. Buffett likes to brag about how little he spends on his cars; according to a long-standing rule of thumb, a new car loses 30% of its value the moment you drive it off the dealer's lot. As a result, some people buy new cars and leave them on the lot! But not Buffett: He buys used cars, and has expressed a preference for those that have been damaged by hail.
Armed with this knowledge, you stand to make a killing: Take a hammer to your 2012 Chevy Equinox, drive it to Omaha and tell Buffett you only used the car to drive to church once. When it started to hail you took it as a sign from God, became an atheist, turned around, and never took it out of the garage again.
3. Avoid Debt, Especially Credit Card Debt. Credit cards are like cocaine; in fact, a lot of people use credit cards to make neat little rows of the drug to inhale, but that's not what I meant.
Use your credit card the responsible way!
Credit cards bring credit--the lifeblood of our economy--within easy reach of the average American. Where before a consumer had to walk downtown to a bank with granite pillars to get turned down for a car loan, now people can open up their mailboxes to find credit card offers that enable them to borrow money for anything they want.
Those loans bear interest at near-usurious rates, however, leaving less money in the bank to pay for luxuries such as taxes. To avoid the so-called "credit card crunch," borrow from your friendly, neighborhood loan shark. You'll get personal attention from your lender when payments are due and save a bundle on stamps!
4. Keep Cash on Hand: Buffett always maintains "at least $20 billion--and usually far more" in cash and cash equivalents. (N.B.--"cash equivalents" does not include discount pizza coupons.) GNN Money recommends that you keep no more than $1 billion on hand at any one time, and keep the rest with our deposit affiliate, GNN Federal Savings & Loan, FSB--where deposit slips are always free!
5. Invest in Yourself: Take this simple multiple-choice quiz: It's the end of the month and you can only pay one bill. Should it be: (a) rent, (b) auto loan, (c) five-year non-refundable Platinum Membership for tango lessons at Tonya's House of Dance?
I think you know the answer: it can take months before your landlord evicts you or the finance company repossesses your car, but you may only have one chance to twirl with Tonya and her bevy of beautiful assistant instructors--go for it!
6. Give Back: According to Forbes Magazine, Buffet once said "If you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%." The bad news is--you're not in the luckiest 1% of humanity. The GOOD news is, that means you don't owe anything to the other schmoes like yourself--enjoy!
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