This is one of those rare instances in which it’s OK to listen to someone who won’t be acting on his own advice.
Warren Buffett, whose net worth dances around $100 billion, draws a $100,000 annual salary from Berkshire Hathaway but he collects billions from dividends.
He obviously isn’t getting a $1,400 stimulus check, but his advice for Americans if they do receive a check is always something to heed.
A Yahoo! Finance story translated Buffett’s discussion at a company shareholders meeting last year into the application of these checks.
The golden advice? Don’t keep giving away money to credit card companies!
Buffett would give you one big priority for the money: Whenever any extra money lands in your lap, your first move should be to pay off credit card debt.
During that shareholders meeting, Buffett told the story about a friend who’d come into a windfall – but also had credit card debt at 18% interest — and sought his advice.
Buffett acknowledged those who depend on credit cards because of pandemic-related financial issues but cautioned some see the cards as “a piggy bank to be raided.”
“If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off,” Buffett said he told his friend. “You can’t go through life borrowing money at those rates and be better off.”
If the checks don’t cover the entire credit card balance, the advice is to roll them into a lower-interest debt consolidation loan.
If you’ve got no credit card debt and no other pressing needs to cover with your stimulus check, don’t waste it.
Consider a strategy Buffett would accept: investing the money, perhaps in Berkshire Hathaway.