“If you buy things you do not need, soon you will have to sell things you need.” – Warren Buffett
We often buy things just for the sake of buying them. When you feel a bit down and you buy a new gadget like an Apple watch, you instantly feel better. The truth is that you do not really need such a gadget. When buying unnecessary or luxurious items becomes a habit, you can get into serious financial trouble. It is important to make a clear distinction between what you really need in life (a house, food, water, electricity, health, etc.) and what is a nice to have (the latest smartphone, a second car, designer clothes, etc.).
Your budget is not endless and if you buy expensive things that you do not need, you will start facing financial constraints. You will no longer be able to buy the things you really need and that is not a good situation to be in. Especially if you start buying with money you do not have, you might even have to start selling things you need.
Warren Buffett is an American investor who was born in 1930. He is one of the wealthiest people in the world and is often referred to as the Oracle of Omaha as he is an investor who sees the long term value of a company when others do not. Buffett is the chairman of Berkshire Hathaway, which is a value investing holding company. The Coca Cola Company, The Kraft Heinz Company, American Express and Wells Fargo are just a couple of companies Berkshire Hathaway has shares in. He is a real philanthropist and supposedly gives away 99% of his fortune to good causes. When asked why he would not give it to his children, he said: “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”