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Warren Buffett believes humans have a tendency to overcomplicate things.
“There seems to be some perverse human characteristic that likes to make easy things difficult,” he once wrote.
When it comes to building wealth, everyone has opinions about the right way to grow your money. And these “get-rich” paths often involve searching for the next new thing, taking big risks and managing your investments actively.
But Buffett believes ordinary investors needn’t make it so complicated. Here are his top three tips for becoming wealthy — without unnecessary complications.
Buffett has often referenced baseball legend Ted Williams’ book, “The Science of Hitting,” while talking about his investment style. In the book, Williams explained that his batting average was significantly higher when he focused on pitches in his sweet spot.
Similarly, Buffett believes investors can perform well if they simply wait for good opportunities to show up rather than chasing every trend. In other words, don’t swing at every pitch that comes your way, but wait for the ones you know you can hit out of the park.
Outside the stock market, real estate is an alternative asset worth taking a swing at — diversifying your portfolio with commercial real estate can provide an additional cash flow stream, which is crucial for managing risk across your investments.
First National Realty Partners (FNRP) is a private equity firm that offers accredited investors the opportunity to invest in necessity based commercial real estate leased by national brands like Whole Foods, CVS and Walmart.
FNRP’s team of experts will guide you through available deals and simplify your allocation process, all within a personalized portal. If your investment generates positive cash flow, you can receive quarterly cash distributions.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
Besides real estate, there are other creative ways to diversify your alternative investments, such as fine art. The Fine Art Group, a global advisory and art finance firm, reports a 14% return on its assets, outperforming the S&P 500’s annualized return of 11.88%.
One company is looking to make art investing accessible to more accredited and non-accredited investors: Masterworks.
Here’s how it works: Instead of spending millions on a single painting at auction, investors can now purchase fractional shares of blue-chip art by renowned artists including Pablo Picasso, Jean-Michel Basquiat, and Banksy.
Simply browse the pieces in their impressive portfolio and choose how many shares you’d like to buy. When the firm sells a piece you’ve invested in, you get a return from any net proceeds. From there, Masterworks will handle all the details, making high-end art investments both accessible and effortless.
“Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard,” Buffett wrote in his 2013 shareholder letter. In other words, investors should focus on the game of picking good businesses and avoid the distraction of stock prices.
To stay focused and avoid distractions, consider bringing in a coach to help you stick to your game plan. If you’re uncertain about your next move, Advisor.com is an excellent resource.
Advisor.com is a user-friendly platform that connects you with trusted fiduciary advisors who can create a personalized financial plan tailored to your needs. After finding your top advisor matches, simply schedule a free initial consultation to get started.
During an interview at Georgetown University in 2013, Buffett described how in the early 1990s Bill Gates told him emerging computer technology “was going to change everything.” Buffett challenged this assertion, asking him if it was going to “change whether people chew gum.”
When Gates admitted that it probably wasn’t going to impact chewing gum sales, Buffett said, “Well then I’ll stick to chewing gum and you stick to computers.”
Technology companies, such as Gates’ Microsoft, have delivered tremendous returns since the early 90s. But Buffett resisted the notion that he needed to understand an emerging, complicated technology in order to make money. Simple consumer stocks, like chewing gum giant Wrigley’s, could be just as lucrative.
One way you can start to incorporate savings automatically into your daily spending habits is through Acorns.
Acorns is an automated investing app that invests the leftover change from your everyday purchases into a diversified portfolio of ETFs. Acorns automatically rounds up the price of your purchase to the nearest dollar and deposits the difference into a smart investment portfolio for you, allowing you to grow your wealth without even thinking about it.
It takes less than five minutes to sign up – all you have to do is link your cards and start spending as usual.
Sign up now and you’ll get a bonus $20 investment.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.