This episode will help you transform your finances using real life advice from a billionaire! Each year, Warren Buffett writes an annual letter to shareholders, reflecting on the past year and commentating on his journey to financial abundance. Once again, 90-year-old Warren drops BOMBS, and he does it with remarkable simplicity! We’ll show you the best takeaways from the letter and how to apply each one to your personal finances.

In this episode, you’ll learn:

• How your attitude affects your finances and ability to grow wealth
• Key investing principles you can apply today
• How to keep setbacks from derailing your financial life
• What Warren did WRONG with money

Research and resources from this episode:

• Berkshire Hathaway Letter to Shareholders (2020)
• Coronavirus Reduces Millionaire Count (Spectrem)

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Are you ready to start winning at money and life? We gathered all of the financial and life advice we’ve read and experienced over the years and put it into one episode!

Research and resources from this episode:

• The Millionaire Next Door by Dr. Thomas Stanley
• Everyday Millionaires by Chris Hogan
• How to Be a Young Money Millionaire By Age (The Money Guy Show)
• Warren Buffett Says This 1 Simple Habit Separates Successful People From Everyone Else (Inc)
• Best Stephen Covey Quotes (Sources of Insight)
• An author who surveyed over 10,000 millionaires found the qualities that make them successful hinge on a distinct behavior (Business Insider)
• What Do We Know about US Millionaires? It Depends on Whom You Ask.

We are currently living in uncertain times, to say the least. For many of us, our daily activities and behaviors have been completely changed; a large number of schools and businesses are temporarily closed and students and employees are learning and working from home. Due to the slowdown in human activity, the economy is (inevitably) also slowing down. Although uncertain times are far less common than prosperous times, thankfully, we can apply wisdom from past uncertain times to today (even though situations may not be exactly the same).

Warren Buffett has lived through many uncertain times. He was born near the height of the Great Depression in 1930 and leads one of the most successful holding companies in the U.S., Berkshire Hathaway. He’s seen almost everything, and there’s a great deal we can learn from his extensive experience with uncertainty and the stock market. Here are some great Warren Buffett quotes to keep in mind during this time of economic uncertainty.

In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

Warren Buffett

We have been lucky over the last decade plus to have not faced a substantial amount of uncertainty in the economy. Growth has steadily continued and the unemployment rate kept shrinking. It is easy to forget that good economic times don’t continue on forever, in perpetuity. We’ve faced many great challenges, both domestically and globally, and we’ve always come out on the other side triumphant. There is no reason to imagine that this time will be any different.

Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”

Warren Buffett, 2016 Letter to Shareholders

It just so happens to be a little over a decade since the start of our last bull market. Dark clouds are everywhere today; an optimistic and positive economic outlook suddenly turned pessimistic and sour as we face a great challenge as a nation and a world. There is reason to be hopeful, though; we’ve seen other countries curb and control the spread of coronavirus. It seems that some economic disruption is likely, but we will return to normal. Businesses and schools will reopen, we’ll be able to enjoy large events like concerts and sports again, and the gears of the economy will start turning faster and faster.

Warren Buffett believes that uncertainty can create opportunity. If you believe in the long-term growth and upwards trajectory of the economy, disciplined investing can mean making the most out of downturns. Nobody knows where the bottom of the market will be, just as nobody knew we reached a peak in the market earlier this year; this is why dollar cost averaging can be so powerful.

Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.”

Warren Buffett, 2004 Letter to Shareholders

Speaking of dollar cost averaging, Warren Buffett is also a fan of disciplined investing. He says if you insist on trying to time the market, it is best to be greedy only when others are fearful. It seems like Warren Buffett is not a fan of trying to time the market and instead believes in systematic, disciplined investing. In uncertain times, disciplined investing can protect against the danger of putting too much money in or taking too much money out of the market at once.

If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

Warren Buffett

While it’s true that downturns can create opportunities for investors, short-term investing still comes with a substantial amount of risk. Over the short-term, the direction of the market can be impossible or nearly impossible to predict with any level of accuracy. Over the long-term, trends begin to emerge and we can see that the market consistently rises over time. A market downturn doesn’t make the short-term more predictable, and it may even make it less predictable.

Do not take yearly results too seriously. Instead, focus on four or five-year averages.”

Warren Buffett

It’s much too early to tell what the rest of the year has in store for the world and the economy, but it is best practice to focus on longer-term results instead of yearly results. Stock market returns vary greatly from year to year, so you can only begin to get an accurate picture of market performance when looking at a longer period of time. Statistically, good years far outweigh the bad years – for every bad year, you typically have about three to four good years.

Wisdom from Warren Buffett is seemingly never-ending, and we think there are many more life lessons to be learned. Our most recent show tries to uncover some of those life lessons; watch it now on YouTube below.

There’s something reassuring about Warren Buffett’s outlook on life.

His journey to building over $81 billion of wealth has been extraordinary. It gives credibility to his super-human ability to analyze numbers, spot opportunities, and give excellent life advice. In this episode, we break down 9 life changing Warren Buffett quotes from his 2019 Letter to Shareholders and beyond. They will leave you inspired to kick-start your financial strategy and reignite your passion for life.

Research and resources from this episode:

• Berkshire Hathaway Inc. Letter to Shareholders
• Wealth Multiplier (The Money Guy Show)
• Everyday Millionaires by Chris Hogan

Enjoy the Show?

• Get FREE downloads full of financial advice from our Resource Page!
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If you have any questions (or just want to say hi!), join the conversation on Facebook, Twitter, or Instagram!

You asked us to share our top recommendations for personal finance books. We give these books to our interns, new team members, and highly suggest them to anyone in The Money Guy family.

By reading these books, you’ll gain an understanding of personal finance that sets you above the rest and, ultimately, change your life for the better. 

You can hear more personal thoughts on each book on our #AsktheMoneyGuy episode, What Books Does The Money Guy Show Recommend?

1. The Wealthy Barber by David Chilton

If you’re looking for a book covering the basics of personal finance – this one’s for you! 

It was published in 1995 with some old-school charm and was written in narrative form, like a storybook. (In other words, it does not read like a textbook!) Even if you don’t know anything about finance, you can enjoy The Wealthy Barber.

It’s educational fiction that (we think) should be required reading for every college graduate as they start their first job. It covers all the basics like, how money can work for you, buying your first house, investing, and saving.

2. The Millionaire Next Door by Thomas J. Staley, Ph.D and William D. Danko, Ph.D

When this book came out in 1996, we found out that millionaires were not hanging out with Robin Leach and driving rolls royces. They were driving F150 trucks! 

You’ll learn how actual wealthy people make decisions. If all you do is read it and behave the way they behave, you’ll be amazed how at how much it changes your circumstances.

This book is very emotional for me (Brian) because it made me realize that I could do this! I could actually build wealth myself. I come from a lower-middle class household, and I grew up with some false misconceptions that to be rich you had to inherit money. Well, I found out from The Millionaire Next Door that 80% of millionaires are first generation, meaning they did not inherit money from family members. That shook me! There’s a lot of madness and noise in your head that just doesn’t match up to what real millionaires are like. One of them probably lives next door to you!

3. How to Win Friends & Influence People by Dale Carnegie

If you want to be a better husband, wife, business partner, or friend, this one’s for you. I kid you not, this book will make you a better human! It goes through some basics of how we’re all wired. What makes us happy? What influences us? The majority of the self-help empire industry is built upon the basic tenets of How to Win Friends & Influence People. Cut out the middle-man go straight to this book.

Whether you’re far down the path of your financial journey or you’re just starting out, we hope these books inspire you! By keeping this knowledge at the forefront of your life will serve you well and set you up for success. Watch the full #AsktheMoneyGuy episode to hear more about how these books have changed our lives.

What did Warren Buffett tell us about personal finance in 2018? It may not be Christmas, but it certainly feels like it when the “Oracle of Omaha” shares his wisdom with us. There have been many of you asking when we are going to cover Warren Buffett’s letter to shareholders. That day has finally arrived!

Buffett shares that there are many things to be excited about, as well as future opportunities for all of us. In today’s episode, we share the most important investment lessons he reveals that you can apply to your own personal finances. Join us for this week’s episode of The Money Guy Show as we explore Warren Buffett’s letter to shareholders.

Here’s What You’ll Find Out in this Episode:

• Our Top Investing Lessons From Warren Buffett’s Annual Shareholder Letter:
  1. Don’t let short-term swings affect your decision making: Do not allow the day-to-day fluctuations change your mind toward the intrinsic value of the company or investments. Have a long-term perspective and plan.
  2. Have a core investment strategy and plan: Are the decision you are making day-to-day, year-to-year moving you closer to your goals? Or are you allowing yourself to get in your own way by not sticking to your strategy?
  3. Character matters and your decisions impact others: Do you make decisions that you are proud of? Are you prioritizing your order of operations correctly?
  4. Take advantage when the rules change in your favor: Warren shares how Berkshire was able to take advantage of the new corporate tax changes. Have you done the work to understand how you can benefit from the new tax rules?
  5. Understand your risk tolerance and risk capacity: Understand debt and leverage. Rational people don’t risk what they have and need for what they don’t have and don’t need.
  6. Surround yourself with good people: Warren shares about GEICO’s Former CEO Tony Nicely. Do you have people around you that are pushing you to be the best version of yourself? An attorney to work through your estate documents? A financial advisor to help serve as your CFO? An accountant to make sure you are optimizing your tax situation? An insurance agent to make sure you are not overpaying? Surround yourself with a team of individuals who can help you navigate the big decisions in your life.
• You can read Warren Buffett’s full annual letter to shareholder’s here

Resources Mentioned in This Episode and Related Episodes        

• 2018 Shareholder Letter
• Financial Order of Operations

Enjoy the Show?

• Make sure you subscribe so you get updates, announcements, and exclusive post-show deliverables!
• Leave us a review on iTunes
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• You can also use #AskTheMoneyGuy on social media!
• Get your FREE copy of The 30-Minute(ish) Financial Plan

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll never miss special announcements and offers, plus you’ll get future podcasts and blog posts delivered straight to your inbox so you can get in on the action right away.

For anyone who has listened to The Money Guy Show for a while, you know how much we love our annual tradition of reviewing Warren Buffett’s yearly letter to Berkshire Hathaway shareholders. Make sure you tune in to this episode to hear us extrapolate the financial insights that apply to all investors.

In this installment of The Money Guy Show, we cover Warren Buffett’s insights about:

• Tax Reform and its impact on public corporations
• What might be bad for your wallet in the coming years
• The common traits all successful businesses have in common (and how Warren decides which businesses to invest in)
• What you can consider doing with your cash reserves
• His outlook on the American economy
• How to spot (and act on) future investment opportunities
• When you should leverage your money in the market (and when you shouldn’t)
• Timeless financial advice that still rings true in today investment environment
• You can read Warren Buffett’s full annual letter to shareholder’s here

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.

Who doesn’t want to succeed in finance like Warren Buffett? He is after all the Gold Standard for how to create wealth over the long-term. With a net worth of $76.1 billion, I think we can all agree that his money advice is worth listening to and trying out for ourselves where appropriate.

We’re dedicating this episode of The Money Guy Show to the ultimate Money Guy who has helped shape a lot of our own philosophies about money and investing. Between his recent HBO documentary, “Becoming Warren Buffett” and his yearly letters to Berkshire Hathaway shareholders, now is the perfect time to focus on the fundamental teachings of the great Mr. Buffett.

Tune in to hear us share ways you can win in finance like Warren Buffett. We’ll explore the traits and behaviors that have made him such a financial success and how all of us can put his good money examples to work in our own lives.

Here’s what you’ll find out in today’s show:

• What the most powerful financial force in the universe is!
• The one thing you can do to safeguard yourself against bad financial decisions
• What true financially savvy people are able to do that separates them from others
• 7 life-changing lessons that Warren Buffett has espoused for decades
• How to adopt these 7 life-changing lessons in your life
• How Warren Buffett makes investment decisions and why it works
• And of course Brian and Bo’s commentary and insights along the way

Warren Buffett demonstrates how the choices you make every day impact your long-term financial success. There is something to the common sense and discipline that Warren Buffett shows us through his life that we can all emulate to our benefit.

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.

It’s our favorite time of year! Well, it’s close for financial fans and money nerds. Here’s what’s going down: Brian and Bo cover the 2015 Berkshire Hathaway Letter to Shareholders in this episode of The Money-Guy Show.

They’re excited to share these takeaways with fellow fans as there’s much that can be applied from this annual letter to our personal lives and portfolios.

In the 2015 edition of the Berkshire Hathaway annual letters, both Warren and Charlie shed light on the past 50 years of their partnership and what they hope the next 50 years will hold. Here are the highlights from each.

Highlights from Warren’s Annual Letter

Brian took tons of notes on Warren’s letter and shares the key takeaways with us:

Knowing the value of investments is priceless.

The $25 million purchase of See’s Candy, which had a $4 million cash flow with only $8 in net tangible assets. It was a great move that allowed the company to generate cash flow, which could then be used elsewhere. Brian likens this to putting your dollars to work for you in your portfolio.

Avoiding the “new paradigm.” This goes back to when the dot com boom occurred, and anything with “dot com” in the business plan was given huge valuations. As investors, we should be wary of this. P/E ratios of 200 are not normal, regardless of what pundits are saying.

A nugget of wisdom learned from Charlie: forget what you know about buying fair businesses for wonderful prices. Instead, buy wonderful businesses for fair prices.

We need to ignore market noise and focus on the basics. Warren also states you should only purchase Berkshire shares if you plan to keep them for at least 5 years. Brian says investors need to have a realistic time horizon when investing in stocks and bonds.

Warren is extremely against leveraged investments. Bo brings up that people are asking if they should mortgage their primary residence in order to invest the proceeds as rates are so low — and the answer is no!

Cash is to a business what oxygen is to a person — and people will panic in response to economic situations, we just don’t know when. Brian reminds us that having cash reserves in the form of an emergency fund is absolutely necessary.

Be aware of investments that require “sudden demands for large sums.” Brian gives the example that so many of their clients are set up for wealth and success, but they often get distracted by riskier investments that seem better. It’s key to stick to the path, because at some point, the music will stop.

Fight against companies that display “arrogancy, bureaucracy, and complacency.” As investors, we need to do the same for ourselves. Brian points out that so many people have a great income, but they’re not turning it into wealth.

Highlights from Charlie’s Berkshire Hathaway Letter

Charlie explains what the core competencies of Berkshire Hathaway are:

• All employees should be invested in the company.
• They want win-win results for everyone – employees and investors alike. Everyone should benefit.
• Berkshire stays away from short-term executives. Those executives that make decisions should be there to face the results at the end.
• They seek to minimize bad effects that come from large bureaucracies at headquarters.
• They want to personally spread the wisdom they’ve attained throughout the years. Education is important.

What’s the Take-Home Lesson for You?

Whether you’re advanced in your knowledge of personal finance, stock markets, and smart investing, or just starting out and eager to learn the basics, there are important lessons to be learned from each of these letters. What can you apply to your own business or financial situations?

In this episode, your Money Guys are breaking through the mystery of investing so you can start putting your money to work for you. Why? It’s the fastest way to grow your wealth.

Brian and Bo hate to see so many individuals out there put off by the idea of investing, so they’ve decided to show listeners how easy it is to get started with investing, and explain why you should.

If the idea of investing intimidates you or you get anxiety thinking about putting your money into the market, you need to listen to Brian and Bo’s advice on traditional investing. It could mean the difference between having a five-figure portfolio or six-figure portfolio in retirement.

5 Tips You Need to Know About Investing

Brian breaks down the simple facts of investing in 5 tips:

• The Fix Is In: Brian explains that if you invest in the market for just one year, you have a 75-80% chance of making money.
• Be Patient: If you invest in the market for 7-8 years, you’re almost guaranteed to make money. Investing for the long-term drives up your potential for success.
• Have a Reasonable Expectation: Brian reminds us that no one has a crystal ball when it comes to forecasting the markets. It’s important to have realistic expectations and not buy into hype. Investors need to realize there’s no “best” time to get into the markets, and that you shouldn’t be so scared of investing that you don’t take action.
• Don’t Swing for the Fences (All the Time): The worst thing you can do as an investor is be over-confident of your risk tolerance. When the market is performing well, it’s easy to think we should invest more, but it’s important to have some liquidity. Keep the future in mind as well: just because life is good now doesn’t mean it will be in 5 years.
• Understanding Your Emotions: Brian goes through the range of emotions investors often feel throughout the market cycle: from being overly optimistic, to being fearful and desperate. It’s crucial to understand your emotions in relation to the market to recognize opportunity.

Brian also mentions how powerful investing can be when you compare your net worth with your earned income. If your net worth has gone up more than your earned income, that means the value of your assets is appreciating quickly, and you’re on the right track to financial independence.

Basic Investment Terms to Know

Brian and Bo quickly go through some basic investment terms you should know before putting any money into the market.

• Cash and Equivalents: Checking accounts, savings accounts, CDs, money market accounts – anything FDIC insured that won’t lose value and is secure.
• Bonds: A loan you make to another entity, corporation, or government. Essentially, you’re letting this entity pay you for the use of your money, and in turn, they’ll pay you interest.
• Stocks: This is when you buy equity into a company, which means you have ownership in the future profitability of that company.
• Mutual Funds: Offered by an investment company, these invest in a basket of stocks, bonds, and/or cash. Instead of buying individual stocks, you can invest in a mutual fund that owns shares in many different companies.
• Exchange-Traded Funds: Similar to mutual funds, ETFs give you a wide exposure to a number of different holdings. These trade like stocks and are more tax efficient than mutual funds.

Lastly, Brian advises that people should also consider tax and risk diversification — you don’t need to invest all of your money wildly. Invest the right way with these simple tips, and you’ll be well on your way to financial independence.