Warren Buffett may be worth tens of billions, but he still lives simply, and his strategies for smart investing and amassing wealth aren't too complicated either and hold up even during these tough times.
But if it's so easy, you ask, why aren't more people as incredibly rich as Buffett? Because his approach takes the kind of discipline, patience and instinct that many people either don't have or are unwilling to develop.
Here are 10 rules that have helped the Oracle of Omaha find and sustain success.
1. It starts with good communication
Buffett's first key to prosperity has little to do with picking stocks. He says you need to become a strong communicator: Wield words as your most important tools.
"Without good communication skills, you won’t be able to convince people to follow you even though you see over the mountain and they don't," Buffett once told a Stanford MBA student.
While this may seem like sage advice for financial planners, it's good for helping anyone develop leadership skills and the ability to think in stressful situations.
2. Look forward, not to the past
Buffett famously stated in the 1950s that "the investor of today does not profit from yesterday's growth." This maxim still holds true today.
According to Buffett, following past trends is much less important than identifying new opportunities. When deciding whether to invest in a company, focus on what's in its future, not its history.
Don't stay stuck in the past when it comes to your mortgage either. No matter how long you've held onto your current home loan, consider refinancing to take advantage of today's lowest-ever mortgage rates.
3. When investing, innovate — don't follow
Adopting a herd mentality is a surefire way to get middling results, Buffett believes. "You need to divorce your mind from the crowd," he has said.
It's tough, but you have to break out from the pack by developing your own investing strategy based on your knowledge and experience. "To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible," Buffett says.
At the same time, be open to good advice. Financial planning services — which today are affordable and available online — can help guide you toward your dream retirement.
4. Live frugally
Buffett famously lives well below his means. He has been known to drive an older, modest car. He still resides in the house he bought in Omaha, Nebraska, for $31,500 in 1958, and he picks up breakfast at a McDonald's drive-thru almost every day.
You can follow his example by looking for new ways to stretch your dollars. For example, when shopping for life insurance, choose an inexpensive term life policy.
Use a free browser extension that will find you the lowest price for anything you're buying online. And, download an app that will reward you with free gift cards for watching videos and completing surveys.
5. Always be willing to learn new things
Buffett likes to say that knowledge accumulates just like interest in the bank. He starts each day with a newspaper, and he reads books on various topics every day.
Consuming information will not only influence your investing, but it also will prepare you for success in all areas of life. Soak up what others can tell you about new technologies and new strategies.
Those who avoid learning new things risk becoming obsolete. Be like Buffett, and you'll never grow too old to learn a new trick.
6. Know when to fold 'em
Don't get the wrong idea — Buffett does sell stocks when he has to. Despite his overall success, he has bet on plenty of clunkers. The trick for long-term investing success is knowing when to walk away.
Buffett learned these lessons as a young man betting on horse races. He tried to make up for losses by increasing his bets, and he lost more money.
Recognize when a stock is a genuine loser, so you can walk away and minimize your losses. If you use an automated investment service, or robo-advisory, your portfolio will be adjusted automatically to protect you when a stock is in trouble.
7. Think loooooooong term
"Buy and hold" is a common, long-term investment strategy that calls for sticking with a stock even when it's having a bad day — or month.
Buffett's approach might be called "buy and hold and hold." As he likes to tell his Berkshire Hathaway shareholders, "Our favorite holding period is forever."
He doesn't mind when a stock takes an occasional tumble, because those are good opportunities to buy more shares at a discount.
8. Never invest borrowed money
When investing, use your own money. Buffett says it's "crazy" to borrow. "It's insane to risk what you have and need for something you don't really need," he told CNBC.
If you borrow to invest, your strategies will be too closely tied to your need to repay the money. Some investments require long-term planning and holding out for growth, which is difficult with a debt hanging over your head.
You don't need much money to invest if you use a popular stock trading app that will allow you to buy fractions of shares for as little as $1. Plus, you never pay any commissions.
9. Dividends are key to long-term growth
Warren Buffett loves stocks that pay dividends. His company, Berkshire Hathaway, gets hundreds of millions of dollars each year from Coca-Cola in the form of dividends.
Dividends come from reliable companies that consistently meet or exceed their goals. Their stocks may not make you a lot of money quickly, but their dividends can put your investing on autopilot.
Other high-dividend-paying companies include Caterpillar, AT&T, Verizon and the investment firm BlackRock Capital — though, ironically, not Berkshire Hathaway.
10. Remember, anything is possible
Buffett is known to plaster his walls with what he calls "instructional art." This includes newspaper front pages with screaming headlines about stock market crashes.
They remind him that, in investing and in life, you need to be ready because anything can happen. If you keep this in mind, then you'll proceed with caution and make informed decisions about your investments.
You'll avoid taking on debt you can't handle, won't live an unsustainably lavish lifestyle, and will be able to withstand market fluctuations — just like Warren Buffett.