With the money that Warren Buffet possess, he is one of those rich American who is not getting $1400 Stimulus Checks, but you should listen to his advice. As Warren Buffet often says Pay off credit card debt whenever there is a chance for it, although world is in love with credit cards, but they’re expensive. Credit Card debt gets quickly accumulated if you don’t pay off on time.
In his last annual shareholders meeting last year, Buffet shared an amusing story of a friend who would sought his advice on credit card debt, and it turned out she was in debt with credit card company with 18% interest.
He emphasized that many Americans need to rely on Credit Card because of financial problem related to ongoing pandemic. At the same time, he mentioned some people think Credit Card as a “piggy bank waiting to be raided”.
“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 his friend. “You can’t go through life borrowing money at those rates and be better off.”
Also Check out our story why you may not get Stimulus money on time.
Buffett says Don’t Use your Stimulus check for mortgage.
Buffett doesn’t like to the idea of having the Credit Card Debt, because “It just doesn’t make sense”. But he doesn’t feel the same for all type of debts and wouldn’t advice on putting $1400 Stimulus check towards your mortgage.
With the money Buffett had for his entire life, vacation home he bought in 1971, he could afford to pay it off cash, but instead he took 30 year mortgage. Back then he thought, 30 year mortgage was “an incredibly attractive instrument for the homeowner”
With the Stimulus check Buffet suggests everyone to do what he does the best, invest.
No Debt? Then you should invest.
Warren Buffet admitted that, just like many young people of his age, the money he would have used to buy his house, he used those money to purchase a stock in his own company. Back then, he bought around 3000 shared of Berkshire Hathaway at about $40 each – an investment which is grown to $750 million as of 2017.
If you have no debt, and no other urgency for those $1400 Stimulus money; then listen to the legend, and consider investing your $1400. Return on investment may not be available right way, with enough number of years it will grow to something much more.
Multiple media outlets report that Berkshire stock has seen average annual returns of more than 20% since the 1960s, versus just 10% for the S&P 500.
Buffett has never split his company’s Class A shares (BRK.A), so the stock is notoriously pricey — now approaching $400,000 per share. But you could get a piece of Berkshire using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
Another way to invest your stimulus check is by opening an account with an app that allows you to build your portfolio using “spare change.” When you link the app to a credit or debit card, your everyday purchases are rounded up to the nearest dollar — and the difference is added to your investment account.