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.
Get some answers, Girlfren’ (or Boyfren’)
One of the greatest things about being home for breaks is definitely late night TV …. or just having time to watch TV, for that matter. So it was with great pleasure that I finally discovered the Suze Orman show - I’ll admit, I’ve been intrigued ever since they started spoofing her on SNL.
I’ve become quickly obsessed …. I spent most of today YouTubing clips from her show (and re-watching the SNL skits) - it’s sort of amazing how someone can be so obnoxious and yet so intriguing at the same time. I mean, she’s clearly smart, but there aren’t that many respectable TV personalities that can get away with referring to a caller as “Girlfren,” and there aren’t that many respectable people period who can emphasize so many syllables with equal importance. She’s sort of amazing.
So halfway through my Suze Orman marathon, my father discovered how incredibly lazy and unproductive I was being me and suggested I ask Suze for advice on how to invest my money - afterall, she’s bound to love me … I have no debt, about $7,000 in savings and some considerable cushion in the fact that I don’t pay many expenses (no rent, utilities, not too many bills, etc) and own a car. So, for probably the first time ever, I’m going to take my dad’s advice (he gave me $5 to get my car washed today and instead, I bought Starbucks … being home is so great).
I’ll keep you updated on what she says …. though I suspect it ends with: People first, money second, things third. Thanks, Suze.
The Suze Orman Show airs Saturdays at 9 p.m. and midnight on CNBC. Check her out.
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 1-day challenge
Does anyone else see something a little ironic about the concept of a one-day challenge? Maybe that it’s only one-day long? I mean, there’s probably little that you couldn’t survive for just one day, even people diagnosed with the black plague were given a few days to go.
Well The Simple Dollar suggested a new way to save money - don’t spend anything for one day. Now if that sounds completely outrageous to you, I think you’ve got some serious financial woes ahead of you. If you’re saying, one day? I can do that easy - then I think you should do it for a week.
It’s all about budgeting - think about what it would really take to spend $0 one week, fill up your gas tank on Sunday, buy groceries that last (eggs, rice, frozen meats, pasta, coffee - yes, that’s a food group), maybe some alcohol to get through the weekend and what else do you really need?
It may seem like you wouldn’t really be saving any money because you’re just spending it all on Sunday instead of throughout the week - but what the challenge does is make you think about what you need and what you don’t need, how much you really spend on things, and how you can reduce that. If you did this once a month, I think the savings would be significant because eventually, your whole outlook on spending, saving and consuming would change.
Ramit picked up this story on I Will Teach You To Be Rich and featured a reader who took the challenge and saved between $50 and $200!
We do a week with NO spending. We fill the car with gas and hit the grocery store on Sunday. Starting Monday, we cannot spend a CENT. Sort of a fun little challenge. And it is only for a week. So, if I see something I need or want, I can get it next week. No cheating. AMAZING results. The first time I did it, I was flabbergasted to have the same $20 bill in my wallet. I got very used to it and so it is a nice little “shot in the arm” technique. Kind of like a fast to begin a diet regime.
Take a shot at it, if you can’t make it for a week, try a day. Let me know how it goes for you.
How to save money on Halloween ….
Relapse.
There were a number of factors that took place this summer that put me in the saving-money mindset: I had just blown multiple thousands of dollars in Spain during the spring semester, I was spending close to $400 a month commuting into the city for my internship and that internship happened to be at a personal finance magazine - so I spent most of my day reading about consumer tips and billionaires.
It was about the same time I read this post from my genious money crush, Ramit. He suggested not buying clothes for ONE YEAR. It was a little crazy, but I thought it might just be the kind of lifestyle change I was ready for. I had worked ever since I was 14 years old, and all I really had to show for it was a 1995 Ford Escort station wagon and way too many $12 shirts from Kohls.
Okay so long story short, I took it for a trial run. I made it the whole summer without buying any clothes, even most of the fall. I was well on my way to committing to the full year - and then I joined Mint.com around the same time I decided I “deserved” to let myself buy a few things (a dangerous mindset of overconsumers).
Then, Mint.com so nicely threw this in my face:
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.
Simple steps to making more money
And now, the easiest way to make more money that I’ve yet to come by. There are just three steps, three steps!
But first, something to set you up for the advice you’re about to receive:
In order to make more money, we need to first understand the essence of money itself. Would you agree? I believe that money is matter not just pieces of paper or coins. Since it is physical matter, it should be handled according to principles of physics.
Got that? Okay, now just try to follow these directions as closely as possible:
You must first have a dream board, and put your dreams onto it. Look at them daily until the goals are achieved.
The second step is constantly telling your subconscious that you are getting richer and richer.
You’re skeptical? Wait, there’s proof:
I once made an audio tape of my goal, and repeatedly played it as a reminder. Within 6 months, my monthly income increased from US 17,000 to US 170, 000, it’s incredible.
And the final step:
Upon waking up and going to sleep, you must fill your mind with thoughts of success and wealth.
But remember:
Generally speaking, thirty days are required for the ideas to be fully incorporated into the subconscious.
Okay, so I know that was completely unconstructive, but I couldn’t resist. If you can handle it, here’s the rest of the absurdity. But really, this anonymous being has answered all my questions …. except one: What’s on Ben Bernanke’s dream board?
Thanks, Alicia!
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