Small habits can lead to big results
In line with Warren Buffett’s recommendations for following simple investing strategies, one way that many people used to save their wealth was by emptying the spare change in their wallet a couple of times a week and putting it in a jar at home.
Nobody would miss the small change, but the quarters, dimes, and nickels would add up quickly, allowing people to save for special vacations or experiences without feeling like they were pinching pennies.
This is the philosophy behind Acorns, an automated savings and investment app. Instead of physically emptying your wallet, when you make a purchase on your credit or debit card, Acorns automatically rounds up the price 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.
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For a more refined approach to saving that is still straightforward you could also open a CD — or certificate of deposit — and turn a little bit of discipline into big savings.
Think of a CD as a savings account where you hold a fixed amount of money for a set amount of time. Shorter-term CDs, like those from six months to one year, would be suitable for the cash you aren’t yet ready to invest in the stock market.
Putting that money into a CD is helpful because you can typically access it sooner than you would if you were investing in the stock market. That’s because you should be prepared to part ways with your investment for at least five years in order to weather the ebbs and flows of the stock market.
CDs are different, as they’re usually accessible in a smaller amount of time, and they offer guaranteed returns – something the stock market can’t provide.
But beware: if you withdraw the funds before the end of the CD’s set term, you can face penalty feed.
You can also opt for a more traditional high interest savings account to optimize your saving strategy. To get started, check out our list of the Best High Yield Savings Accounts of 2024 to find some great savings options that earn you more than the national average of 0.4% APY.
Invest in real estate
Buffett has previously said that real estate investments generally stand up well against inflation: “...you buy once, and then you don’t have to keep making capital investments. So, you do not face the problem of continuous reinvestments involving greater and greater dollars because of inflation.”
While his advice is sound, investing in real estate can be difficult if you don’t have the capital to purchase a property or piece of land outright.
But that no longer means you can’t invest in the real estate market.
With today's technology, platforms like Cityfunds allow investors to grow their returns by investing in residential properties in top U.S. cities — like Denver, Austin, Nashville and Miami — without the burden of traditional homeownership costs.
Cityfunds allows investors to invest in diversified portfolios of owner-occupied homes. In exchange for capital, Cityfunds secure an interest in the home’s future value. As the home appreciates, so does the value of Cityfunds equity investment.
This means you can invest in the housing market of the city you love for as little as $500, without the high upfront costs or the challenges of managing a property.
In addition to owner-occupied properties, you can invest in vacation and rental properties through platforms like Arrived.
Back by world class investors like Jeff Bezos, Arrived lets individuals investors invest in rental properties and vacation homes without the hassle of homeownership or property management.
To get started, simply browse through their curated selection of homes, each vetted for income potential.Once you find a property you’re interested in, you can select the number of shares you’d like to purchase. You can start investing in real estate with as little as $100.
Invest in yourself
At the 2022 Berkshire Hathaway annual shareholder’s meeting, Buffet said “Whatever abilities you have can't be taken away from you. They can't be inflated away from you,” he said. “The best investment by far is anything that develops yourself, and it's not taxed at all.”
While this isn’t a traditional investment tip, Buffett firmly believes that by regularly investing in knowledge and self-improvement, you yourself become an asset and can more easily access opportunities for growing your wealth.
For example, Masterclass is currently offering “Mastering the Markets” – a series of 4 online classes taught by four Wall Street titans — including Ray Dalio and Joel Greenblatt — who have managed over $150 billion in assets.
In these classes, you’ll learn directly from seasoned investors teaching you how to make the market work in your favor, identify hidden investment opportunities in any market and manage long-term risk. By equipping yourself with the knowledge, you can make smarter choices to grow your wealth.
