Wanna Save 'Real Money?' Buffett Has 2 Pieces Of Advice For Cash-Strapped Consumers

Zinger Key Points
  • Some insurers favor drivers who live in certain geographical areas and work in certain occupations more than GEICO does, Buffett says.
  • GEICO mostly "offers the low price than does any other national carrier selling insurance to all comers," he says.

Billionaire investor and investment guru Warren Buffett is admired by novices and experts alike for his sound financial advice. On Saturday, he shared some pearls of wisdom via a message he released through a letter.

Skimping Costs: Starting off his message with a warning that he doesn’t make stock recommendations, Buffett said consumers can rely on the services of two of Berkshire Hathaway, Inc.’s BRK BRK subsidiary companies GEICO and Borsheim’s.

“I have two thoughts regarding your personal expenditures that can save you real money,” he said.

About 40% of the auto drivers in the U.S. can save money by insuring with GEICO, Buffett said. The figure is not 100% because insurers differ in their underwriting judgments, with “some favoring drivers who live in certain geographical areas and work in certain occupations more than GEICO does,” he said.

The billionaire added that GEICO mostly offers “the low price than does any other national carrier selling insurance to all comers.”

Buffett additionally recommended luxury jeweler Borsheims.

“Fine jewelry, watches and giftware will almost certainly cost you less at [Borsheims],” he said.

“Our one-store operation, with its huge volume, enables us to operate with costs that are fully 15-20 percentage points below those incurred by our competitors. We pass the benefits of this low-cost structure along to our customers,” Buffett said.

See Also: Best Retail Stocks Right Now

Why It’s Important: Buffett’s recommendation, though self-promotional, may come in handy for cash-strapped consumers, who are struggling in an inflationary environment. Consumer price inflation has remained elevated despite the cooling off seen since the June 2022 peak.

Consumers, who fuel two-thirds of the economic activity, are also left to contend with job cuts as companies restructure and right-size in a bid to survive in an inclement economic environment.

So far, spending has held up despite the uncertainties as consumers dip back into their savings and live on credit.

The SPDR S&P Retail ETF XRT rose 1.28% to $73.42 on Friday, according to Benzinga Pro data.

Read Next: Berkshire Hathaway’s Q1 Operating Earnings Surged 39% — Here’s Why

Photo: flickr

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