Going into 2025 without saving? I can follow Warren Buffett and start building wealth

As the cost of living crisis continues, not everyone is as lucky as Warren Buffett to find a fortune in the bank. In fact, there are an estimated 8.7 million people living in Britain who have no savings, with over 11 million having less than £1,000 as we enter 2025.

For those who are in debt or don’t have an emergency fund, putting money aside to deal with this issue is a very important smart move. In fact, even Buffett has advised that paying off credit card debt is an important step in the journey of building wealth. But for those with little savings and no high-interest loans to worry about, now would be a great time to follow in the footsteps of successful investors as they aim for long-term financial freedom.

Focus on long-term quality

A quick look at the portfolio of Buffett’s investment firm, Berkshire Hathaway, reveals that most of his positions are wrong. In fact, most of it consists of brands that focus on consumers, financial services, and energy providers.

Yet despite the lack of high-profile biotech or rising AI stocks, Buffett’s investment record has been quite impressive. This is because even boring businesses can be profitable investments if they are high quality and priced right. In fact, as more investors chase the hype train, finding high-quality non-core businesses in overlooked industries or sectors is becoming increasingly easy.

But what makes a business high quality? There are two sides to this equation. There is a quantitative aspect surrounding finances, growth opportunities, and cash flow. However, there are also quality factors to consider. And this last part is where Buffett spends most of his time looking for competitive advantages.

Having an edge over rival firms that is sustainable and difficult to replicate can be the difference between average and market-beating returns. That’s how companies like it an apple they ascended the industry, lending them enormous pricing power and cult-like customer loyalty.

These benefits can come in many different forms, from a reputable product to a novel operating model or access to a unique resource. It is up to investors to disclose these intangibles. The more profitable a business is, the more likely it will be successful in the long run if the finances are also in good shape.

Buffett’s top stock to consider now?

Following Buffett’s investment philosophy resulted in many monopoly-like stocks entering my portfolio. And one that I share with him MasterCard (NYSE:MA).

The digital payment processor almost needs no introduction, with more than 3.4 billion cards issued worldwide. Although it is still closely related to Visathe company continues to benefit from the benefits of a powerful network effect. As more MasterCard credit and debit cards are used, more merchants want to accept these cards to complete transactions, which in turn draws more cardholders into the value creation loop.

In recent years, regulators have begun to investigate the card payment industry, with both Visa and MasterCard subject to anti-monopoly laws. And continued regulatory intervention in payments could hamper future returns to shareholders.

However, with performance ratios sitting above 55%, the days of being a cash machine seem to be far from over, in my opinion. So I think it’s a stock investors should consider in 2025.