Take full advantage of low interest rates
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.
Always be ready for the worst
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
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.
Be careful with stocks
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
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.