Key Takeaways
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Buffett’s guiding rule is to never risk what you truly need for something you don’t need.
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High interest consumer debt, especially credit card debt, is a near-certain savings killer and should be paid off before investing.
Warren Buffett thinks your biggest financial drag isn’t saving too little. Rather, it’s credit card debt quietly compounding at high interest rates.
“The idea of trying to borrow money at 18% [or more] and thinking you’re going to get ahead in life—it isn’t going to work,” he said when asked about high-interest debt in 2001.
According to Buffett, paying off high-interest debt will beat almost any investment idea he could offer you. Given that the average credit card interest rate in the U.S. is 21%, a…