Lessons from Warren Buffet

Lessons from Warren Buffet

One of the richest people in the world, Warren Buffet is known for his frugal lifestyle.

He has lived in the same house for decades. Comfortable but not overtly luxurious or expensive. He has been driving the same car for 10 years.

Two emblematic examples. But there is a list of others, along the same lines.

What can we learn from this posture?

Appreciate what is important in life.  Not the appearances so valued by the vast majority of the population.

It is taken for granted to buy heavily, especially to create an image. The rich can do it because they have the resources. The less fortunate go into debt because the temptation is irresistible.

But from an objectively financial point of view, those who live with a budget consistent with their economic situation, end up having a much better standard, for the simple fact that they don't have to pay so much interest on loans.

In Brazil we have been having one of the highest real interest rates in the world (interest rates - inflation). Around 10%!

Since the electric power sector is "capital intensive".  Interest rates affect and a lot, the amortization costs (which are the single most important item). of investments in generation, transmission and distribution of electric power.

Following Buffet's successful path we should save energy (energy efficiency), set up demand response programs, reduce power theft, choose only to build new generation/transmission/distribution based on merit (and not on crony projects) and the list goes on and on!