Warren Buffett warned about the perils of personal debt in a rare interview last May that aired last week.
The famed investor, 95, also offered timeless advice about parenting, moving on from mistakes, choosing a job, and living a full life during the two-hour CNBC special titled: “Warren Buffett: A Life and Legacy.”
Many people “love spending beyond their income” by racking up credit-card debt, but that’s a path to ruin, Buffett said. “The rest of your life, you’re underwater, and why in the hell do you want to be underwater?”
The self-made billionaire said that people who aren’t worried about money tend to be “quite a bit happier” than those who are. There’s “nothing magic” about managing your finances, he added. “You just have to think a little and use a little discipline.”
Buffett acknowledged that teenagers and college students aren’t “inclined to use a lot of discipline,” but he still gives them the same advice: “Don’t get in debt.”
“And beyond a certain point, if you get in a hole or anything, it is difficult to dig out, isn’t it?” he said. “It’s impossible, and I give credit to people who do it. But do it the easy way.”
One exception is taking a mortgage out on a house, but even then you “have to be careful,” Buffett said.
Parents should set a good example
“My dad was always very forgiving of my misbehavior,” Buffett said about Howard Buffett Sr., an Omaha stockbroker and four-term Republican congressman. “He’d just say, ‘I know you can do better.'”
Buffett said that was “very powerful stuff” because his father was right, and the young Buffett knew it. He recalled “behaving like a jerk for a long time,” and said it was “nice to have somebody have faith in you.”
The legendary stock-picker, who recently stepped down as Berkshire Hathaway’s CEO after more than 50 years in charge, praised his three children, whom he’s tasked with disbursing virtually all of his vast fortune to good causes.
“If you want to have good children, be a good parent,” Buffett said. “You don’t give them lectures about doing bad things when you’re doing the bad things, and they’re actually just acting like teenagers.”
Buffett said his kids — Susan, Howard Jr., and Peter — “didn’t have to watch hypocrisy” growing up, as he and their mother largely lived up to the values they taught them.
“They never saw us behave like we were extremely rich or anything, although they saw us fly off to New York and do different things, and we had plenty of fun,” he said.
The trio witnessed Buffett’s intensity at work and pride in his investment returns, but they “didn’t see us craving money just to say to other people: ‘Look, I’ve got money, and you don’t, ha ha ha,'” he said.
Buffett said his children “did a lot of crazy things, but of course I did too.” He said that people should be “very forgiving” to themselves and not dwell on their past missteps, as they can’t be changed and “nobody cares.”
He said they should focus instead on improving their behavior going forward, as the “second half of your life should be better than your first half” as you grow wiser with age.
The right job provides more than a paycheck
Buffett, who’s joked that he “tap dances to work” because he enjoys his job so much, repeated his trademark advice to pursue a career in what you love.
“Look for the job you’d take if you didn’t need a job,” he said, where the “fact you get a paycheck is incidental to what you’re doing.”
Buffett, famously a voracious reader, said that one can “learn a lot of things out of a book,” but real-life experience is crucial too.
“You can’t have your heart broken by reading a book when you’re three or four years old, or having it read to you,” he said. Nor can you experience the “thrill” and “exhilaration” that come with “accomplishing something until you actually do it,” he added.
Reflecting on his own life, Buffett said he was lucky to be born in the US, live into his 90s, stay generally healthy, and have “all kinds of interesting experiences.”
“I mean, you won the lottery,” he said.
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