Warren Buffett is known for his voracious appetite for reading. He believes firmly in the translation of widespread reading habits (often regardless of the subject matter) to an improved investment capacity. For Buffett, the idea is a simple one: The more a person reads, the larger their knowledge base becomes. This creates an increasing reserve of actionable information stored.
Real, physical changes take place in the structure of the brain when reading is done regularly, and new pathways and frameworks of thinking are opened as a result. A reader will become a better problem solver, analyst, and confident decision maker, all because of the time spent training their brain. “That’s how knowledge builds up. Like compound interest,” he once quipped. According to Buffett, reading also helps him to be less impulsive in his investments: “I read and I think… I do more reading and thinking, and make less impulsive decisions than most people in business.”
Taking time to learn something every day will keep you mentally sharp, giving you an edge when it comes to making new investments. This is also great when it comes to budgeting. The more time you take to sit and stew with your thoughts, the less likely you may be to make a rash decision on new spending.