4 Rules You Have to Follow to Be A Millionaire, According to Warren Buffett’s

Hello!

Are entrepreneurs as confident today as they were before the Covid-19 pandemic?

We know that the majority of S&P 500 companies were founded in down markets. The most successful entrepreneurs use difficult times to listen to customers and markets, innovate when necessary, and build more resilient businesses than ever.

However, for many the current climate feels different. Exits once planned have been delayed or transformed. Consumer behavior has shifted in unexpected ways, the workforce has become more diverse, and traditional employment structures continue to evolve.

Is it still possible to achieve financial security and retire comfortably amid all this uncertainty? From my perspective, yes — though the path may differ from what you once envisioned. By thinking like Warren Buffett, we can create a practical roadmap for what is needed now.

When referencing Buffett’s principles, we are highlighting a mindset rather than the individual himself. These rules, shared across interviews and writings over the years (including a personal note to financial advisor Adiel Gorel, creator and host of the PBS specials Remote Control Retirement Riches and Life 2.0), have remained consistent for decades and are especially relevant during today’s economic challenges.

1. Pay yourself first

Buffett has repeatedly emphasized the importance of “paying yourself first” — setting aside a portion of income before covering other expenses.

Many entrepreneurs focus intensely on their companies and the promise of a “big exit,” yet this approach rarely delivers lasting security. Some founders repeat the cycle multiple times without building personal wealth.

As one expert who had owned 29 companies before the pandemic observed: “You can always tell entrepreneurs in a room. They tell the best stories. They die broke almost invariably.”

The most financially secure individuals are often those who practiced consistent discipline rather than waiting for a major liquidity event. They calculated their retirement needs, automated savings (sometimes in hard-to-access accounts), and covered living expenses only after setting money aside. They avoided directing the bulk of their resources toward high-risk ventures or luxury spending.

One inspiring example is a man who, as a teenager, worked multiple part-time jobs while living in his car. He later purchased a trailer and began investing in gold coins, stocks, and other assets, following principles learned from his great-grandfather. Now in his mid-60s, he has been retired for 14 years after founding, owning, and exiting several companies.

2. Be careful about splurging on brands

Choose a home and location that allows flexibility — whether for quick resale, part-time rental, or conversion into a permanent income property. This approach can provide both additional revenue and tax advantages.

Financial advisors often recommend allocating no more than 20% of income or investment returns to “the three F’s”: fashion, food, and fun. Professional image advisor Lauren Solomon notes that even remote work is no excuse to neglect personal presentation. She reminds clients: “You can’t ask other people for money when you look like you have never had any money.”

When considering luxury purchases, evaluate them as potential long-term investments. Does the item feature timeless quality and classic style that can be worn or used for decades?

3. Take care when taking out loans

Buffett has often warned: “If you purchase things that you don’t need, you will soon sell things you do need.” Credit cards can quickly erode savings. Following Buffett’s cash-first approach while strategically using cards to maintain a strong credit score offers the best of both worlds.

4. Investing with borrowed money requires extra caution

Buffett has consistently advised against borrowing to invest in securities. An exception appears in his personal note to Adiel Gorel. In a 2012 MSNBC interview, Gorel discussed Buffett’s well-known preference for 30-year fixed-rate mortgages on single-family homes — a product more common in the U.S. than elsewhere.

Fixed-rate loans allow inflation to gradually reduce the real cost of the mortgage while tenants help pay down the principal. Buffett acknowledged that single-family homes represent an attractive investment class and noted that Berkshire Hathaway would acquire many if the scale were sufficient.

Although Berkshire never pursued mass purchases, individual investors can benefit significantly from owning a limited number of single-family properties financed with 30-year fixed-rate mortgages, particularly when rates remain below 4%. Used prudently, this form of debt can support long-term retirement goals.

Many additional principles apply to investing and saving. For now, we recommend that everyone take the timeless advice of the “Oracle of Omaha” seriously. These fundamentals can benefit all of us — now more than ever.

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