The man, the legend, the interview: Warren Buffett
Magically, a transcription of a PBS Nightly Business Report interview with Warren Buffett ended up in my inbox and I thought it would be a great place to pull a catchy quote for a Money Talks post (which is basically my cop out when I have nothing else to write about). But halfway through the interview I realized it was way to good to pick and choose. Buffett - CEO of Berkshire Hathaway, worth about $60 billion (pre-economic collapse), and widely considered to be one of the smartest investors in the world - is truly an amazing guy.
For someone who’s life you would think revolves largely around money, he is, afterall, an investor by title, he seems so unphased by the economic climate right now.
A PBS reporter interviewed Buffett as a part of the Nightly Business Report’s 30-year anniversary special about his talks with President Obama, his optimism for the economy in the long run, and how he hasn’t altered his investing strategies since 1949, or maybe ‘50 (no, he will NOT give you investing recommendations, even if the reporter begs, which she does)
Here’s a quote to satisfy those of you who don’t like to read, the majority of the interview after the jump for those of you in the middle, and for anyone who wants the whole beast - post a comment and I’ll e-mail you the full interview.
Well the most important thing to fix right now is the economy. We have a business slowdown particularly after October 1st it was sort of on a glide path downward up til roughly October 1st and then it went into a real nosedive. In fact in September I said we were in an economic Pearl Harbor and I’ve never used that phrase before.
- Warren Buffett,
CEO, Berkshire Hathaway,
inventing new phrases.
Defeated.
The only thing worse than a New Year’s Eve party that ended with shattered glass and a hole in my parent’s wall was having my Mint.com account laugh in my face come 2009 - sure, I spent the latter part of 2008 cautiously watching every penny that left my wallet, but then came Christmakkah. All of the painful sacrifices I made, including pledging to go a year without buying clothes (which is still going well, by the way) were worthless because I drained my bank account on presents. I don’t mean to sound selfish, I enjoy buying gifts for family and friends, but there are ways to survive the holidays without depleting your savings - I just broke every rule.
So I, like the economy, am starting out the year in a downturn. But I’m getting a head start for next year and I suggest you do the same. It turns out, Christmas Club Savings Account, offered at many local banks or credit unions, are sort of nonsensical because they make almost no interest. But the general idea is easy to replicate, just find yourself a high-interest CD (easier said than done these days, but don’t forget about Bankrate.com) that allows free transactions throughout the maturation period. The only stipulation on you is to actually transfer a part of your paycheck to the CD - the one benefit of the traditional Christmas accounts is that it’s out of your control.
So in light of all this I have a two-part New Year’s resolution: 1) Be able to save money THROUGH the holidays next year, and 2) use that money to pay my parents back for the damage done to their home.
Finally, something you can’t blame on our generation
It’s not exactly news that the economy is a little sub par right now or how it’s affecting consumers (that’s the name the financially stable policy makers use for the lowly public) - but The New York Times published an article on Saturday about debtors that are even deeper in debt during this recession than previous recessions … there are a whole lot more of them. The downturn economy is affecting people even harder this time around than usual - maybe because it’s hitting on all fronts (housing prices are down, incomes are down, jobs are down, lending is almost nonexistent) but I think it’s also because people in 2008 just live differently than people did during some of the last deep recessions (like in the early 1980s when Congress reacted to failing banks by deregulating them and loosening lending restrictions … good idea, guys).
I know, I know, I’ve said this a million times but people just don’t save as much anymore - even the idea of saving has transformed into the idea of investing. I’m not saying I know much about the stock market yet, I don’t have any investments, but I do know that the people who have made out best coming out of the financial crisis are people who have CASH. According to Bankrate.com, in 1985 Americans saved 11.1% of their income, in 2005 that rate slipped to -.5%, the first time since the Great Depression that it dropped below zero, and it’s pretty much stayed down there ever since.
The facebook of finance
I’m as much a victim to an Internet addiction as the next person - I fought the Facebook news feed, but now find myself checking in every day, just to quench my boredom. I visit all the sites on my blogroll more than once a day, just to see if they’ve posted something new.
The New York Times has even fed my obsession with tracking things by setting up Times People - which lets you follow story recommendations from readers you know.
Those things are all great. But I’ve hit the motherload. Mint.com, an online money management system. I’ve heard about Mint.com before but was always a little worried about giving out literally all of my banking information. Mint.com now owns my life. But I’m okay with that because it’s fantastic.
Basically, the site links with your bank accounts, savings, investments, loan companies - anything at all you’re associated with that has to do with your money - and puts it all together in a convenient sort of news feed of your finances. AND THEN after you obsessively categorize all your purchases, the site gives you a color-coded pie chart of your spending trends AND ideas on how you can save based on your personal trends. PLUS it compares your spending habits to the national or local average!
So far I see only one drawback, I’ve had an urge to spend money all day just so I can track it.
Consumed by Consuming?
Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole. How’s that for a book title? A little dramatic? Yes. Completely true? I think it might be.
I recently read this book by Benjamin Barber about how our capitalist society has turned citizens solely into consumers and how a society of consumers is empowering the corporate world to actually manufacture our needs. To be fair, most of the students I know who have read this book found serious faults in Barber’s argument and in general, just didn’t enjoy the book. It was hard to get through (there are 91 citations in the first chapter) but I totally bought his point (pun intended, haha).
I’m not necessarily recommending anyone read his whole book because it was a little painful, but check out the excerpts below and follow the link to a video clip and take his message into consideration - YOU DON’T NEED HALF OF THE THINGS YOU ARE BUYING!
While you’re watching/reading, take this into consideration: In his last book, Jihad vs. McWorld, Barber predicted that religious extremists in other parts of the world would soon feel so trapped by the West’s intrusion into their cultures that they would be forced to retaliate violently (read: 9/11). He’s a regular Nostradamus.
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