Savings = Consumption Deferred

Savings = Consumption Deferred

I heard Warren Buffet say that the other day and it really struck me. I’ve been turning it over in my head ever since.

It was at the 2024 annual Berkshire Hathaway meeting in Omaha. If you’ve never been, it is an experience quite like any other, and with Warren Buffet being 93, there probably won’t be too many more with him there.

He said, “The definition of Savings is just Consumption Deferred“.

Anything you don’t spend on consumption today, you then have available to put into savings for tomorrow.

And what you do with it tomorrow can be anything from consumption to charity to passing it along to your family and more.

He was talking about it in reference to a specific case, someone who had been a Berkshire shareholder for several decades and had just cashed in $1B worth of Berkshire Hathaway stock to donate to charity.

Can you imagine the kind of impact $1B will have?

The owner could have cashed in that stock and bought fancy new stuff for themselves decades ago, but the value wouldn’t have been anywhere close to $1B, and it for sure wouldn't have had the impact it will today.

I’ve always had a savers mindset, but I hadn’t really thought of it quite like that before — Savings = Consumption Deferred.

Do you think about savings in those terms?