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Thursday, 19 July 2018

3 Reasons You Should Live Below Your Means (Like Warren Buffett Does)

We all know Warren Buffett is worth a heck of a lot more than you just spent on lunch. 
He could afford hundreds of homes if he wanted. Yet Buffett has continued to live in just one home--the five-bedroom, 2.5 bath property he bought in Omaha in 1958 for 
$31,500--even after amassing his wealth. Splurges, such as his private jet, are the exception, 
not the rule. And when it comes to being happy, that's probably one of the 
smartest choices Buffett's ever made, and not just because frugality means 
more money available to invest.

1. Something to look forward to

The brain loves novelty. That's because novel things release feel-good chemicals 
like dopamine so we feel happy and stay motivated. That said, if we constantly
 expose ourselves to new material things, it can throw off our brain's chemical 
reward system. It becomes harder and harder to feel satisfied, and suddenly,
 we need more stuff or bigger treats to get the same feeling of pleasure.
 Psychologists around the world recognize this physiological issue when they
 treat shopping addictions.
When you make like Warren Buffett and live more simply, you're not conditioning
 your brain to respond and seek out extravagance. Instead, you teach yourself
 to see treats as outside the bounds of normalcy, enabling your brain to give 
you more pleasure from the experience when you do indulge. Buffett usually 
enjoys an inexpensive breakfast from McDonald's, for example, so if he happens
 to start his day with a world-renowned chef, he's definitely going to remember it.

2. Less to keep track of

Ever heard the phrase, more money, more problems? That's not just a joke. 
The more stuff you buy, the more you have to organize and protect. 
You suddenly have to be concerned about upkeep and legal issues 
like insurance and security. And now, instead of concentrating on new ideas, 
you're spending more and more time managing. (No, "hiring a guy" isn't a
 solution either, because you still have to make sure they're working ethically 
and as directed.) If you happen to make a mistake in that management, you have to deal with the guilt and embarrassment of that, too.

3. A sense of connection, not division

Sure, it's nice to enjoy a dip in a hot tub or feel the power behind the latest 
sports car. But your average Joe or Jane doesn't do those things every day.
 In fact, many American families are struggling just to keep paying rent. 
So the more stuff you've got in your pocket and the higher you set your 
material standards, the less relatable you can become to the people
 around you. That's awful news considering that connections directly
 relate not just to physical health but to mood and mental health, as well.
 An 80-year study from Harvard, for example, found that people who are
 more isolated are less happy, live shorter lives, and suffer brain decline 
sooner than those who aren't isolated. Another study of 200,000 people 
by the London School of Economics similarly found that being in a relationship 
was the factor that produced the biggest increase in happiness.
Most workers and business leaders spend enormous energy trying to 
climb the ladder and get bigger paychecks. That's because we tend to see
 dollar signs as a marker of success. But living below your means can make
 a real difference in how content you are, determining how easy it is for you to 
relax, get excited, and bond with other people.
Even as money starts coming in for you, stay grounded. Buy and do for others 
more than for yourself, like Buffett, who's ranked as one of the most charitable 
billionaires, having given away more than $46 billion since 2000. It seems to 
work pretty well. After all, ever see a picture of Buffett looking truly stressed or 
tense? Yeah. Didn't think so.

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