🥤 Warren Buffett’s Timeless Guide to Money: Earn, Save, Spend & Invest

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1. How to Earn (Active Income) 💼

Before passive income comes active income. You must first build your earning power.

• Invest in yourself first – skills pay the best dividends.

• Choose growth over starting salary – long-term > short-term.

• Work with honest people – “You can’t make a good deal with a bad person.”

👉 The best investment you will ever make is in yourself. The more you learn, the more you’ll earn.

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2. How to Save 💰

It’s not your salary that makes you rich, it’s your saving habit.

• Pay yourself first – Save before you spend.

• Treat savings as a fixed bill – never miss it.

• Think of savings as soldiers – every rupee saved works for you 24/7.

👉 Do not save what is left after spending. Spend what is left after saving.

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3. How to Spend 🛒

Spending is where most people fail.

• Live below your means – Buffett still lives in the house he bought in 1958.

• Avoid debt – credit cards = financial poison.

• Spend on what matters – health, knowledge, family.

• Ask before buying: “Will this matter in 5 years?”

👉 If you buy things you don’t need, soon you will have to sell things you need.

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4. How to Invest Your Savings 📊

Saving without investing loses value to inflation. Buffett keeps it simple:

🔹 Buffett’s Simple Asset Allocation:

• For Most People: 90% Equity (index funds) + 10% Debt (safe bonds/FDs).

• If Conservative: 60% Equity + 40% Debt.

• If Young (20s–40s): Go heavy equity (70–90%), keep some debt for emergencies.

• If Near Retirement (55+): Shift to safety (40–60% debt).

🔹 Buffett’s Investing Rules:

• Buy businesses, not stocks – understand them.

• Look for moats – durable advantages like Apple, Coca-Cola.

• Ignore market forecasts – nobody can predict short-term moves.

• Be patient – compounding needs decades.

• “Be fearful when others are greedy, and greedy when others are fearful.”

👉 Equities are the engine of growth, debt is the seatbelt, and compounding is the driver.

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Buffett’s Simple Formula for Wealth 📝

1. Earn actively → Build skills, grow income.

2. Save aggressively → Pay yourself first.

3. Spend wisely → Live below means, avoid debt.

4. Invest simply → Index funds, quality businesses, long-term horizon.

👉 Do this for 10–30 years, and one day your money will work harder than you do.

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Final Buffett Thought 🌳

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Plant your financial tree now — with earnings, savings, wise spending, and patient investing.

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