5 Pieces of Money Advice Warren Buffett Gives Millennials

BY MINDA ZETLIN, AUTHOR OF 'CAREER SELF-CARE: FIND YOUR HAPPINESS, SUCCESS, AND FULFILLMENT AT WORK'@MINDAZETLIN

Warren Buffett loves offering advice to younger people about life, health, and, of course, investing. But most of the advice he's given to the young over the years is just as useful for people of any age.

The personal finance site GOBankingRates has compiled a list of 10 pieces of advice Buffett often gives to Millennials who aspire to great wealth. We should all be following every bit of this advice. Here are five of his most useful tips.

1. Use the power of compound interest.

"Time is your friend, impulse is your enemy," Buffett once said. "Take advantage of compound interest and don't be captivated by the siren song of the market." Elsewhere, he's said that his wealth comes from a combination of lucky genes, living in America, and compound interest.

Using the power of compound interest by letting your money grow in place or automatically reinvesting dividends is a great way to increase your wealth over time. It might not be sexy, but if it's good enough for Buffett, that probably means it's a good idea.

2. Understand accounting principles.

This is another not-very-sexy piece of advice. But consider that Buffett's vast fortune, not to mention that of Berkshire Hathaway's investors, is built on his and his colleagues' ability to analyze businesses and choose which are likeliest to be good investments over the long term. And that ability begins with understanding accounting principles.

"Accounting is the language of business, and you have to be as comfortable with that as you are with your own native language to really evaluate businesses," he said on CNBC a few years ago. "You really have to understand what can be done with accounting, when it gives you correct answers and when it gives you wrong answers."

3. Avoid debt.

If Buffett could give one piece advice to young people, it would be "just don't get in debt," he said at a Berkshire Hathaway annual meeting. Of course, that's a trickier equation for today's young people than it was for Buffett at their age because these days, it can be difficult to get a college education without running up student debt, and depending on the degree, that college education might still more than pay for itself.

Still, Buffett has said, the value of an education depends on the person who gets it. And while he's a believer in investing in yourself, he's also said that college-bound young people should carefully evaluate the value of that investment compared with the money they'll have to spend and the debt they'll have to incur to get it.

4. Be very skeptical of get-rich-quick opportunities.

Buffett once noted that trying to get rich quick is one of the two most common money mistakes he sees. "It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick," he said.

It's one reason he's carefully avoided Bitcoin and other cryptocurrencies. That, and his famous aversion to investing in things he doesn't thoroughly understand.

5. Seize real opportunities when they come around.

"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble," Buffet likes to say.

If this sounds like it contradicts the last piece of advice, it doesn't. The key is to learn to understand business well enough that you can tell when something is a get-rich-quick scheme that's too good to be true and when there's real potential to make serious money with limited risk. It's one reason Berkshire Hathaway's portfolio is not as diversified as you might expect. About $177 billion--just over half the total Berkshire portfolio--is invested in just one stock: Apple.

Buffett apparently sees Apple as one of those rare investments that rains gold, and he's put out a mighty big bucket to catch it. So one way to read his advice is to go invest in Apple. Another, perhaps better, way is to make sure you have learned all you need to so you can quickly recognize those raining-gold opportunities on the rare occasions when you find one. And then be ready with an oversized bucket of your own.

Photo credit: Getty Images.