5 of the smartest ways to invest your money, according to millionaires and billionaires

Warren Buffett
Paul Morigi | Fortune | Time Inc | Getty Images

Warren Buffett, Barbara Corcoran and other self-made millionaires and billionaires didn't simply happen upon success. They made smart decisions and investments along the way, all of which you can learn from.

There are no guarantees, of course, that these investments will make you rich. Still, according to people with experience, here are five of the smartest things you can do with your money.

Invest in companies you know

If you're investing your money in the stock market, "never invest in a business you cannot understand," says self-made billionaire and investing legend Warren Buffett.

Stick with companies and industries you're familiar with because, at the end of the day, "risk comes from not knowing what you're doing," he says.

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Invest in your wardrobe

When real estate queen Barbara Corcoran rented her first apartment in 1973, she collected a $360 commission check, ran over to Bergdorf Goodman and "blew it on a new coat," she says. "It was the smartest thing I could have done with the money because, in it, I felt powerful."

Corcoran, who now stars on ABC's "Shark Tank," was onto something. As research shows, when employees wear nicer clothes, they achieve more.

Barbara Corcoran, founder of The Corcoran Group and "Shark Tank" investor
Jim Spellman | Getty Images

Invest in a home

Self-made millionaire and personal finance expert David Bach says buying a home is an escalator to wealth.

What's more, "if millennials don't buy a home, their chances of actually having any wealth in this country are little to none," he says. "The average homeowner to this day is 38 times wealthier than a renter."

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Invest in yourself

"The best investment you will ever make is in yourself," says self-made millionaire Grant Cardone. Doing so helped him climb out of debt, build five businesses and earn his multi-million dollar fortune.

For Cardone, investing in himself meant watching sales training videos and listening to self-improvement tapes, but it could be anything from enrolling in a class to attending a conference.

Investing in yourself is "a-no lose deal," Cardone says. "It will always give you a return. Nobody can take it from you. It's yours."

Self-made millionaire Grant Cardone
Courtesy of Grant Cardone

Invest in your relationships

One of the best investments you can make is affordable to anyone: your relationships.

Taking the time to get to know people — especially your team and coworkers — and what motivates them is crucial, says New England Patriots coach Bill Belichick, one of the most successful coaches in NFL history.

"There are a lot of things that affect what happens on the field that occur off the field," he says. Players "have wives and girlfriends. And they have babies. And they have personal situations. They have parents that are sick. All of it runs in together."

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