Podcast Episode 255: Applying the Best Warren Buffett Quotes to Retirement Planning

Today’s Wisdom:

Warren Buffett has become synonymous with successful investing and savvy decision-making, but he’s also authored some of the great financial quotes. Today we’ll share a few of our favorites and apply them to the retirement planning we do with clients.

Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.


What You’ll Learn:

If someone asked you to name a famous investor, Warren Buffett would likely be one of the first names to come to mind. With a net worth over $100 billion, the CEO of Berkshire Hathaway hasn’t made too many mistakes with money through the years and he’s shared that wisdom along the way.

You might not even realize it but some of the popular financial quotes originated with Buffett. On this episode, we’ll share a handful of our favorites and we’ll get Eric Hogarth, CFP® to help us make sense of them from a planning standpoint.  

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

Simply put, planning takes a while. We all want money today and worry about liquidity, but you have to think about the money you’re going to need in 10, 20, 30 years. A quote like this tells us that you have to look at today but you have to look further out as well. That’s what a plan accomplishes.

“Risk comes from not knowing what you’re doing.”

Buffett has said many times that he wouldn’t invest in something that he wasn’t comfortable owning for 10 years, which ties into this quote. If you chase the next hot investment like GameStop or crypto or whatever people are currently talking about, you’re putting yourself at risk. In order to minimize your exposure to risk, you have to build a plan and understand what and why you’re putting your money into certain companies and products.

“Price is what you pay. Value is what you get.”

We love this quote. It’s fantastic because we often fixate on the price tag. This commonly happens in our industry when people begin looking for an advisor but worry more about what it will cost rather than what service is provided. Let’s focus on changing our mindset and paying attention to what you get for the amount you pay. That’s not to say that you should just spend whatever something costs but you have to understand both sides. Know what you’re going to get so that you can determine whether it’s worth it to you.

“Only when the tide goes out do you discover who’s been swimming naked.”

You have to hope for the best-case scenario but plan for the worst. We’ve been having a lot of conversations recently about the volatility in the market, and those ups and downs are what we think about when planning with clients. But what if someone gets sick? What if your plan is to work until 65 but your employer at 62 thinks differently? These are just a few of the scenarios that could test your retirement. We have these conversations because things change and you have to have some readiness for that.

“Rule #1: Never lose money. Rule #2: Never forget rule #1.”

It’s a misconception that these billionaires and successful investors never lose money, but they do. They also know how to approach markets and invest in a way that they’re successful over a long timeframe that they stay invested. If you have good balance, you own good things, and you don’t have all your money in one place, then you’ll be able to minimize your losses over time.

“In the business world, the rearview mirror is always clearer than the windshield.”

This quote can be applied to all aspects of our life and it’s a great reminder that past results aren’t indicative of future performance. Live in the now and plan based on where you are and where you need to go. Remember what you felt like in the past and use that to help you make decisions, but don’t waste a lot of time looking back because you can’t do anything about that.

As always, we encourage you to take advantage of our Money Map review process to get that process started.

[0:32] – Background on this discussion

[1:07] – Quote 1

[2:13] – Quote 2

[4:55] – Quote 3

[6:29] – A landscaping example  

[8:36] – Quote 4  

[9:38] – Quote 5  

[12:07] – Quote 6

13.30 – Money Map review

Thanks for listening to this episode. We’ll be back again next week for another show.


Final Thoughts:

“You don’t need to be able to recite the entire prospectus, but you definitely need to have a basic understanding of what you’re doing, what’s a reasonable expectation, so you can be comfortable with it.”

– Eric Hogarth

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