1. Save
One of Buffett’s core principles is the power of compounding: where you can earn returns on both your initial investment and its accumulated growth. For example, had Mary invested her $10,000 and allowed it to grow at a 5% annual compounded rate for 10 years, it would have amounted to $16,288.95.
But finding the best possible rate isn’t always easy. If you’re willing to park your money for at least a year, you can get a rate of return over ten times higher than a typical high-yield savings account with a certificate of deposit (CD). A CD locks in your funds for a set period, providing stability and guaranteed returns, which the stock market cannot promise.
CD Valet can help you shop around across various banks and financial institutions. The platform allows users to easily compare different CD terms, interest rates, and features to find the best options for their savings goals.
They aim to simplify the process of choosing the right CD by providing transparent and up-to-date information, helping you maximize your return while locking in financial security.
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Learn More2. Invest
Beyond saving, another way to take advantage of compound returns is through investing.
Investing is higher risk than a savings account, but it can also lead to higher returns. That’s why when Buffett started gifting his family shares instead of cash, Mary Buffett wisely chose to retain her gifted shares in a diversified trust, rather than cashing them out.
But you don’t need to invest in private trusts to ensure your portfolio is diversified.
With Acorns, you get instant diversification every time you spend. Their platform helps you start saving and investing each time you make a purchase on your credit or debit card. When you spend, Acorns automatically rounds up the price of the purchase to the nearest dollar, and places the excess into a smart investment portfolio.
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3. Real estate
In 2012, Warren Buffett told CNBC that if there was a way to buy thousands of single-family homes at once, and to manage them easily, he would “load up.” He also emphasized he’d take out mortgages at “very, very low rates.”
Not everyone can purchase multiple properties, nor can they tap into low mortgage rates. After all, the average rate for a 30-year mortgage was 3.65% in 2012. These days, a 30-year fixed mortgage rate is 7.13%.
There are, however, ways to invest in real estate and avoid some of the downsides of the market.
First National Realty Partners (FNRP) allows accredited individual investors to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself, negotiating for mortgage rates or managing the purchasing logistics.
FNRP has relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods. And since the investments are necessity-based, they tend to perform well during times of economic volatility and act as a hedge against inflation.
With a minimum investment of $50,000, you can engage with experts, explore available deals, and easily make an allocation, all in one personalized portal.
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Learn more4. Plan for the future
Another reason Buffett’s not a big fan of cash gifts is that its value erodes over time. Buffett famously said, “If you don’t find a way to make money while you sleep, you will work until you die.”
Investing for retirement
To avoid working after retirement, you need to be prepared with the right investments and accounts. For instance, qualified Roth IRA withdrawals are tax-free. So your earnings and any growth are tax free, too.
Selecting the right account can be daunting, though. WiserAdvisor connects you with pre-screened financial advisors who can guide you in choosing the best Roth IRA to meet your needs.
When you sign up with WiserAdvisor, you’re custom matched with two or three advisors near you who meet your specific needs. Your financial advisors will contact you to set up your initial one-on-one consultation — for free, with no obligation to hire.
Gold for retirement
You could also turn a cash windfall into a physical asset, like gold, to diversify your portfolio. Gold has historically acted as a hedge against inflation, and many find it to be a more secure place to invest their wealth.
Opting for a gold IRA gives you the opportunity to hedge against market volatility by allowing you to invest directly in physical precious metals rather than stocks and bonds.
If you’d like to convert an existing IRA into a gold IRA, companies typically offer 100% free rollover. Others might offer free gold, silver or other metals up to a certain amount when you make a qualifying purchase.
You can check out our top picks for industry-leading companies offering gold IRAs.
Compare offers instantly and request a free information guide to help you understand how to diversify your portfolio and secure your retirement fund.
Planning for your future
Most of Buffett’s wealth will only be shared with his kids once he passes on. His ethos is you should “give your kids enough so they can do anything, but not so much that they'll do nothing.” Whether or not you agree, you’ll want to ensure your own wishes are honored. Platforms like Ethos can help.
The platform allows you to easily create your legal will or trust 100% online. For many familines, it takes as little as 20 minutes. You can try their guided platform risk-free for 30 days.
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