Warren Buffett, widely regarded as one of the world’s most successful investors, is the primary shareholder, chairman and CEO of Berkshire Hathaway. Due to his hard work, smart business moves and his unceasing frugality (that’s right, frugality!), Warren Buffett is also currently, as of 2011, the third richest person in the world. Despite his immense wealth, he has always lived a frugal lifestyle. In fact, he currently still resides in the same house in Omaha, Nebraska that he bought in 1958 for $31,500.

As you can probably tell, we are big fans of Mr. Buffett here at Tip Hero.

According to Investopedia:

Warren Buffett has a clear strategy for making money. He often says, “The first rule of investing is don’t lose money; the second rule is don’t forget Rule No. 1.” It’s a strategy he employs in his personal life as well as in his profession. It begins by living far below his means.

In fact,

Despite a net worth measured in billions, Warren Buffett earns a base salary of $100,000 a year at Berkshire Hathaway. It’s a salary that has not changed in 25 years. A man of simple tastes, including watching sports on television and eating junk food, Buffett easily supports his modest standard of living with this salary.

Now doesn’t this seem like a guy that Tip Heroes can look up to?

Though we may never see even a fraction of the amount of money Warren Buffett has, we can easily learn and benefit from his strategies. By living below our means and being smart about our money, we too can hope to watch our money grow throughout the years.

Take a look at some of the money (and life) lessons we can learn from the life of the “Oracle of Omaha” himself:

1. Do What You’re Passionate About:According to Warren Buffett, the greatest luxury in life is doing what you love. By following this advice, it seems possible that everyone can afford a “luxury” or two. Buffett has said countless times that he loves what he does for work so he doesn’t spend much money or time on travel or relaxation. He enjoys his day to day life, and therefore lives in the lap of luxury.

   You don’t have to own billions to do what you love. And you probably won’t live a very fulfilling life if you don’t do what you love. Even if you aren’t as in love with your job as Buffett is with his, find a hobby that you do love. If possible, you can even try to earn a side income while doing it.

2. Always Think Things Through:It is far too easy to make quick decisions without thinking things through. However, it is not easy to suffer the consequences of such rash decisions. According to Warren Buffett,
   

   You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.

   While saving wisely and living frugally has led to Buffett’s great wealth, his commitment to thinking decisions through has also been essential to his success.

3. Spend Your Money Wisely:Even though Buffett could use his billions to splurge on fancy houses, expensive cars and other luxuries, he doesn’t. He practices frugal living and refrains from spending money foolishly. The lure to spend money, whether we accumulate it over time or come into it all of a sudden, can be great. But taking a leaf out of Buffett’s book can easily lead to greater wealth, financial independence and a less stressful, debt-free life.

   This isn’t to say that you shouldn’t buy the things that make you happy if you’ve got the money to do so. But you should always think things through and search for deals. Don’t go crazy just because you have the money to spend.

4. Give Back to Others:Warren Buffett is well-known for sharing his wealth with others, not keeping it all to himself. He has even stated that when he dies, most of his fortune will go to charitable causes. Though most of us don’t have enough money just lying around to just throw around to charities, we can take a leaf out of Buffett’s book and give back in other ways.

   There are ways to be philanthropic on a budget. Whether you donate hair or clothing, finding ways to do good will make you feel good and give you some perspective on life as well.

5. Live Simply:Live below your means, invest early, don’t blow your money on fancy things and don’t willingly go into debt. Determine the things you enjoy most in life and aim to make the most of those things. Following these rules, like Buffett does, could lead to a simpler, more enjoyable life in the long run. For instance, Buffett still lives in a pretty small house in Omaha, Nebraska despite his millions. His reasoning behind staying there? The home has everything he needs. And since he doesn’t need anything bigger or better, he simply doesn’t need, at the moment, to buy another house.
6. Never Pay Retail:Buffett never pays too much for stocks if possible. By being patient and waiting for sales on the market, he may find a great company that can be purchased on clearance.

   The same principal should be applied to everything else. In this day and age, there really is little reason to pay retail for things like clothing and food. With a little patience and bargain hunting, it’s easy to find sales, coupons, etc. to make your shopping trips less expensive.

7. Don’t Go Into Debt Unless You’ll Profit Later:According to Wealth Advisor:
   

   Frugal habits seem to be hard to shake off. Buffett, who would probably never go into debt except to borrow the capital to invest for even more profit, sent his daughter ’round to the Cadillac dealer to pay for his new mid-range car in cash. Brin tells how he still feels bad if he leaves food on his plate at meal times.

   […]if you are going to go into debt, it should be in order to borrow investment capital that can produce income and growth. Don’t go into debt just to buy a bigger and better wide screen TV.

   There are only a few good reasons I can think of to go into debt. One, for example, would be investing in a college education. That degree should pay you back several times over in the future, so it’s definitely worth investing in. And according to Buffett, the most important investment you can make is in yourself.

Sources: Get Rich Slowly, Prevential.com, Art of Legacy, Wealth Advisor, Investopedia

Photo credit: Gev.com