Who wants to be a billionaire?

I've been fortunate to have met quite a few rich people in my life. All of them were self-made. Their wealth was not inherited.

Here are some characteristics they have in common:

1. Frugal/Thrifty - They didn't like to spend money. I met a guy worth $10 billion that sold his old refrigerator for a few hundred dollars and was elated. lol

2. They buy things with investment income.
The rich do not buy luxury items with their salary. They invest their salary in stocks, real estate, and businesses. If the investment rises and they make a profit, then they buy something luxurious.

3. No debt.

4. Slow and steady wins the race. They have a long-term outlook.

5. None of them went to an Ivy League university. I'm not sure why. Maybe it's because they spent too much money for school and have so much debt?

6. They take calculated risks. I have a wealthy uncle who quit his high salary (over $100,000 a year) job to start his own company.

7. Detail oriented. My ex-boss, who had a net worth of about $50 million, was a stickler for details. He would always say, "Andy, details, details, etc."

Do you have any of these characteristics?

"If you want to know why I passed Bill Gates, it's because I spend less. It's a tribute to thriftiness."
- Warren Buffet

What can we learn from the world's richest man?

Mr. Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own car.

Buffett is still living in the same house he bought when he was 28 for $31,000

Here are some of my favorite quotes from Buffet:

"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

"Time is the friend of the wonderful company, the enemy of the mediocre."

"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

"Wide diversification is only required when investors do not understand what they are doing."

"If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that."

"I always knew I was going to be rich. I don’t think I ever doubted it for a minute."

"If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?"Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall."This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

"The Stock Market is designed to transfer money from the Active to the Patient."

“I’d be a bum on the street with a tin cup if the markets were always efficient.”

"The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable."

"The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry...If you buy it over time, you won't buy at the bottom, but you won't buy it all at the top either. If you have 2% a year of your funds being eaten up by fees you're going to have a hard time matching an index fund in my view."