Warren Buffet

Aug 15

“Do not save what is left after spending, but spend what is left after saving.”

— Source Unclear

The second quote in this blog comes from another—although quite different—investing giant, Warren Buffett. We’ll hear quite a bit from him, but this quote speaks to me because it is so consequential.

When people reflect on what drives their investment success, they often focus on asset allocation, security selection, cost, and taxes as key drivers. While all of them are true and important, I feel that in particular, the savings and investing rate matters over the long term, but it is frequently overlooked. How much you can save and invest and how early you start to matter because your investments will compound over time. And compounding is a very powerful force that is an investor’s friend. But to have compounding work for you, you must start early and ideally with meaningful amounts.

So Warren Buffett's encouragement to not think of saving and investing as an afterthought but to actually start with them first in our personal budgeting is a very powerful approach. It reframes positively how we think about and prioritize saving and investing. It also encourages us to budget, which so many people struggle with or don’t do.

As for me, paying myself first and investing from early on will pay dividends over time, I am sure!