Warren Buffett is one of the world’s richest men and easily the world’s best investor. We’ve talked before about his criteria for investing and about some of his investing strategies. But, when you look at everything all together, all of Buffett’s wisdom can be broken down into a simple piece of advice that can be applied with basically any purchase: longevity.
Basically, how long has the company been around, and how long will it continue to be around? Here’s what Buffett said during the 2017 Berkshire Hathaway Shareholder’s Meeting when he was asked how he can spot a good investment:
“We sort of know it when we see it,” Buffett said. “It would tend to be a business that for one reason or another we can look out five or 10 or 20 years, and decide that the competitive advantage that it had at the present would last over that period.”
So how does that apply to non-investment decisions? Well, it all comes down to value and quality. Much like with investments, it’s better to evaluate prices based on how long the item will last rather than simply how much it costs. If you spend $200 on a really nice jacket, for example, and you wear it every day all winter, you’re getting more value than if you spent $20 on a jacket and it falls apart after a month.
However, that doesn’t mean that you have to only buy expensive things or that you should always spend money. Buffett himself tends to be rather frugal more because he’s careful with his money than because he needs to save it. Why spend money on things you don’t need and don’t love?
So the next time you’re purchasing something, take a note out of Warren Buffett’s book and look at the price, the value, and consider how long you intend to own the object to make sure its worth your money.