JLP from AllFinancialMatters had a great article today titled, Warren Buffett’s 10 Ways to Get Rich.  There is a lot of wisdom in this article.  If you want to learn how to be rich Buffet style, these 10 tips are a good start.

1. Reinvest your profits - this is the only way to take advantage of compound growth, which is money growing on money.

2. Be willing to be different - you follow the herd, you’re gonna get hurt. Going against the herd may be scary, but can pay off if done properly.

3. Never suck your thumb - If you find something good, act. Don’t sit around doing nothing.

4. Spell out the deal before you start - Get all the details in writing before you follow through.

5. Watch small expenses - The article mentions a guy who counted 500-sheet rolls of toilet paper to make sure he wasn’t being ripped off. That seems a bit extreme to me but I see the point of not wasting money.

6. Limit what you borrow - I believe that the only acceptable forms of debt are student loans, car loans (reasonable car loans), mortgages, and possible 0% deals that may pop up every once in a while. Now, don’t mistake that sentence to mean that I think it’s okay to have debt—that’s not what I’m saying. The main thing is to use debt as a tool and use it wisely.

7. Be persistent - Always remember the saying: “If at first you don’t succeed, try, try again.”

8. Know when to quit - You have to know when to say, “when.”

9. Assess the risks - Do some worst-case-scenario analysis before you proceed. In other words, count the costs before you begin.

10. Know what success really means - I love the fact that Buffett is not on an ego trip with his giving. According to the article, Buffett does not want any buildings named after him. That’s soooooo cool! I really respect that about him.

For me, the points that are really important to learn how to be rich are points 1, 3, and 8. Point number one is that you need to reinvest your profits. That is absolutely true. Reinvesting your profits means that you can’t spend so much on personal things. You need to reinvest the money back into your business.

The third point is that you need to take action. You will not get rich thinking and reading about how to get rich. Go out there and start doing stuff. Only through effort will you give yourself the chance to become rich.

Point number 8 highlights the need to not spend more than your earn. You will never learn how to become rich if you get into debt. The saying goes that you need your money to work for you. If you are in debt, your debt is working against you.