Take full advantage of low interest rates

Red icon of interest on the background of coins
1599686sv / Shutterstock
With interest rates falling, Buffett says it's a great time to borrow.

Buffett became one of the wealthiest people on the planet by capitalizing on opportunities. He sees fantastic opportunities for borrowers in 2020, thanks to the Federal Reserve.

"This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money," he said during Berkshire Hathaway's online shareholders meeting earlier this year.

To help the economy recover from the coronavirus, the Fed "did the right thing" by cutting a key interest rate almost to zero, Buffett says. Other rates have fallen like dominoes throughout the economy.

How to be like Buffett: If you're a homebuyer or homeowner and have a solid credit score, grab one of today's all-time-low mortgage rates while you can.

It's possible to find rates on new and refinance mortgages as low as 2.50% if you shop around and compare mortgage offers from several lenders.

Bill Gates made a splash in 2017 when he bought $520 million worth of U.S. farmland, and he’s continued to invest since. What’s in it for Gates?

Read More

Always be ready for the worst

Idea of catastrophe and danger . Mixed media
Sergey Nivens / Shutterstock
Buffett said a 'megacatastrophe' was coming.

They don't call him an oracle for nothing. The multibillionaire said during an interview in March: "I've always felt a pandemic would happen sometime."

In 2019, he warned that the world was due for a "megacatastrophe." It would be some kind of "total surprise" that would dwarf devastating hurricanes Katrina and Michael, Buffett told Berkshire shareholders in a letter.

He said his company, which is big in the insurance business (it owns Geico and other insurers), would suffer massive losses — but would be ready for business the next day.

How to be like Buffett: You, too, can be ready for whatever comes — by buying life insurance, to provide financial protection for your loved ones. Coverage for family breadwinners has become especially important in 2020, in the midst of a deadly and highly contagious disease.

In just 90 seconds online, you can find multiple life insurance rates tailored to your family’s needs and costing as little as $1 a day for $1 million in coverage.

Don't carry credit card balances

Young man eating asian sushi from home delivery using credit card as payment with open hand doing stop sign with serious and confident expression, defense gesture
Krakenimages.com / Shutterstock
Buffett says if you're carrying credit card debt, get rid of it

As layoffs have skyrocketed during the pandemic, some Americans have found themselves forced to pile on more credit card debt.

Turning to credit cards because of financial hardship is one thing, but Buffett says some people use plastic as "a piggy bank to be raided."

During the virtual shareholders meeting, he talked about a friend who came into a windfall and asked for advice on what to do with it. She also had credit card debt — at 18% interest.

"If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off," Buffett said he told her. "You can’t go through life borrowing money at those rates and be better off."

How to be like Buffett: When credit card debt becomes overwhelming, experts say a good first step toward getting rid of it is to roll it into a debt consolidation loan.

You'll simplify your bills and slash yout interest costs, to help pay off the debt faster. Instead of 18%, you might find yourself paying as little as 5.95% APR.

It seems like a tricky time to get into real estate, and being a landlord isn't as passive as you think. Look at these low-stress options instead.

Read More

Be careful with stocks

Covid-19 disease prevention. Aircraft interior cabin deep cleaning for coronavirus.
Pradpriew / Shutterstock
Buffett has gotten out of airline stocks because of COVID-19.

The coronavirus crisis is ravaging entire industries, including retail, restaurants and entertainment. Buffett has decided the damage to one particular industry is more than he can bear as an investor.

"The airline business — and I may be wrong, and I hope I’m wrong — changed in a major way," he told his shareholders. That was how he explained why Berkshire sold off all the airline stocks it owned.

Buffett says people have been discouraged from flying, so "the world has changed for the airlines."

One of the carriers his company dumped from its portfolio was Delta Air Lines, whose stock price has lost almost half its value since the start of the year.

How to be like Buffett: Investors who do their homework and make informed choices have been rewarded this year as the stock market has marched to new record highs, even amid the chaos of COVID-19.

A popular stock trading app helps you reduce your risk by diversifying your investments into exchange-trade funds and even fractional shares (pieces of individual stocks) — and you never have to pay any fees or commissions.

Stick to your long-term plan

Close up shot of the dart arrow hit on bulleyes of dartboard to represent that the business reached the target of company with dark tone picture style. Target and goal as concept.
Things / Shutterstock
Buffett says stay on target with your financial goals.

Warren Buffett says he's confident the U.S. economy will bounce back from the COVID-19 crisis.

"Nothing can basically stop America," he said at the online meeting. "We haven’t really faced anything that quite resembles this problem, but we faced tougher problems. The American miracle, the American magic has always prevailed, and it will do so again."

But he also said no one knows what's going to happen, so investors should brace themselves for a potentially long recovery. He says they'll get a "fine result" if they hold onto stocks long-term.

How to be like Buffett: A financial planning service can help you sit tight and stay focused with your investments, and using one if much more affordable and convenient than you might think.

Today, you can connect with a certified financial planner online and inexpensively, to keep you on track toward your long-term goals.

Are you thinking about saving? Well, stop thinking about it!

Take the change out of your piggy bank and make it work for you.

Acorns is a financial wellness tool that automatically rounds up your card purchases to the nearest dollar and puts those savings into an investment account. It takes the worrying out of investing and matches you with one of five investment portfolios.

Take five minutes to sign up for Acorns today and collect a $10 bonus.

About the Author

Doug Whiteman

Doug Whiteman

Former Editor-in-Chief

Doug Whiteman was formerly the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

What to Read Next

Morgan Stanley says AT&T is an ‘attractive risk/reward’ tradeoff right now and could see a quick 20% pop — here's why

AT&T has been a big disappointment. But this catalyst could quickly unlock some value.

Bill Gates is betting big on US farmland – should you?

New technology allows you to get in on the ground floor alongside the billionaire.

3 of the simplest ways to start investing in cryptocurrencies

Crypto has hit the mainstream. And getting in has never been easier.

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.