Here's how to retire like Warren Buffett – The Motley Fool
Warren Buffett is one of the richest people in the world. Despite the huge gap between his riches and what most of us just mortals can hope to achieve, a retirement like him can be very close to you.
You see, Buffett is 88 years old and he is still working. As CEO and Chief Capital Officer for Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) he has no plans to call it ends in the near future. If you are willing and able to plan for it, you can also design a future that keeps you active, committed and relevant well into your golden years.
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It's not as easy as "just keep working"
Being employed so far into the 80's is not a small achievement. Like anyone who works in a physically challenging field, has ever had a health hazard, or has met a compulsory retirement age, telling you that keeping a job can be difficult when you get older. Buffett has created a strong structure around himself that gives him the opportunity to continue working long after others have stopped.
While you may not be Managing Director of a multinational company that he has, you can put plans that are similar to him that you can stay engaged long after your peers have called it ends. The key factors for Buffet's success are:
- A strong stake in the company he works for
- Sufficient control over his money so it works for him
- A job he clearly enjoys
- Work as he can
Buffett owns around 283,000 shares in Berkshire Hathaway's Class A.
These factors work together to enable Buffett to be employed and they can also work for you.
A strong stake
Buffett owns around 283,000 shares in Berkshire Hathaway's Class A warehouse. At around $ 314,477 per share, it's around $ 89 billion bound in the company he's leading. As any shareholder, he has an expression in the company's board and management team, and because he is a significant shareholder, his voice is particularly influential. As a result, as long as he will remain the CEO and his mental and physical health, he will probably remain the CEO.
Although you're not likely to own the big effort of the big company, you can own your own small business and have about the same level of control over your ability to continue running it. If you have not been an entrepreneur before, you might want to buy a franchise or small business for someone else who is ready to retire a smoother path than starting a new company from scratch.
To go on that route, you mostly buy a job. And if you buy a proven business model or buy a franchise, you restrict your choices to those who are within the structure of the business or franchise. Nevertheless, if your goal is to stay active, engaged and involved far beyond a regular retirement age, the owner becomes a lot to say if you are going to do it.
Solid control of money that works for him [19659007] With a net worth of around $ 89 billion, Buffett could spend more than $ 2 billion a year more than he earns and still be unlikely to survive his savings. Nevertheless, he is known to live in the same house he bought in 1958 for around $ 31,500, and ate his breakfast for $ 3.17 or less on McDonald's (NYSE: MCD) . By having money that works for him and keeping costs under control, Buffett is financially independent.
It's valuable for your quest to retire like Buffett, even though your net worth is well below 0.005% of his. Cash flow management is an important skill for any household or small business. Bankruptcy from spending more than you take in is one of the only things apart from health that can force you out of a job when you own the company.
You do not need Buffett billion in financial flexibility to control your own finances, but you need a solid grip on the money that goes out and the money comes in. As long as more money comes in than going out, you have enough flexibility to meet your own needs. It's good enough to be in sufficient control of your finances to stay active and engaged as long as you choose to do it.
A Job He Clearly Enjoyes
With somewhere near $ 89 billion to his name at age 88, Buffett could call it quit or change his profession if he chooses to do it. Still, he still shows how to work and indicates that he has no plans to retire at any time soon. Clearly, he loves his job and going to work means more to him than to have it many more hours a day to do anything else he chooses.
Likewise, even in your golden years, you still have 24 hours in your day and seven days a week. If you are able to fill your time with personal meaningful work that you like to do, why stop? Many retirees report boredom as one of the unexpected side effects of life after work. With a meaningful job you like, you can fill your days far more productively than just rocking the porch and watching the world go by.
Work He Can Achieve Just As His Body Is In The Age
Buffett has admitted that he is not physical what he used to be. If he were in a physically demanding job, such as a warehouse operator or construction worker, he could already have been forced to cut or retreat because the body could not handle it anymore. As it is his main responsibility is the capital allocation for Berkshire Hathaway. For that work, he needs a sharp mind, which is possible to keep despite a body showing signs of age.
Just as you look forward to your own active career that lasts a regular retirement age, you should plan for work that you manage to manage as your body changes with age. Remember to be the boss through a strong ownership position and control over your own cash flow, allowing you to choose what to do. You can choose what to work based on what interests you and what you can achieve, and as long as you are the owner, nobody is really able to take it away from you.
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Buffett has the ability to continue to work well past a standard retirement age because he has been able to succeed, even as he age. He is the owner and has control of his own cash flows. He obviously thrives with what he does, and the work he does can be done even by those who are not physical what they used to be.
Although you are the CEO of a multinational company, you are not in the future, you can follow what worked for him to improve your chances that you were still successfully employed long past a traditional retirement age. The first and most critical step is to make sure you have control over your cash flows. From there you can put the rest in place and set the stage for many productive decades to come.
