Billionaire Warren Buffet, with net worth of Rs 1190000000000 shares GOLDEN rule to become rich, says avoid THESE 5 money traps

Earning less, spending more? If yes, Billionaire Warren Buffett, hailed as 'Oracle of Omaha' has a pro tip for you. He emphasizes that building wealth is not just about earning more, it's about spending smartly. Warren Buffet, has net worth of 14,200 crores USD (Rs 1190000000000) at the age of 94. So, it is better to listen to his advice, i.e. 'avoid these five common money traps' to secure a strong financial future. Let's dig deeper into these 5 things.

1. Buying a brand new car

The first thing we do after we start earning is to buy a new car, for comfort, for convenience or often for show off. But, Warren Buffett says, no, as it is not the most financially fit decision for many people. Why? As soon as you take the car out of the showroom, it's value begins to depreciate, often by 20-20% in the very first year. And 5 years down the line, the car's original value depreciate up to 60%. Even Warren Buffett follows the same rule, he is known to drive a modest car, a 2014 Cardillac XTS, which he bough on discount. A better investment option is assets, where value appreciates. 

2. Credit Card interest

Credit card is often a 'debt trap', where high-interest debt becomes one of he biggest wealth killers. Let's take example of India, here credit card interest rates can exceed 30% annually. This means that carrying a balance of ₹1 lakh could cost you ₹30,000 or more in interest alone each year. Buffet advises that "If you're smart, you don't need to borrow." He says to use credit card for convenience no consumption, a good advice amid the rise of consumerism culture.

3. Say no to Gambling or lottery tickets.

Warren Buffett warns against investing money in gamble or lottery tickets, and refers them a "tax on ignorance", paid by those who don't understand probability. These are just blind bets on luck, and obsession with 'get-wuick-rich' schemes, where people wait for some miracles to occur. They do give momentary thrills but are usually against the players. 

4. Houses bigger than you need

Houses are a necessity, but a house bigger than you need is a best way to waste money to boost your ego. Bigger houses mean higher property taxes, maintenance costs, utility bills, and staffing requirements. Warren Buffet says, 'A home should serve your needs, not your ego.' He still lives in the same Omaha house he bought in 1958 for $31,500.

5. Complex investment products

Warren Buffett says, “Never invest in a business you cannot understand.” he says do no invest in financial instruments, convoluted mutual funds, or new-age investment schemes or any related things, if you do not have a full clarity about it. He says investment should have simplicity, focusing on low-cost, long-term investment have more predictable outcomes. So before investing, have a clear knowledge and understanding about it.