Planning To Invest In Stock Market? Learn These Tips from Warren Buffet
Warren Buffet is a businessman, investor, and a philanthropist. He is the world’s second wealthiest man with an estimated net worth of $80 billion. He is said to be the greatest investor of the 20th century, where he managed to raise the value of his company, Berkshire Hathaway by 586,817%.
Buffet did not come from a rich family. All that he has now is built through his perseverance and dedication. He learned at a young age the value of hard-earned money and he became passionate about it. So what are the tips of the great Warren Buffet can give us and our investment journey? Here are 6 tips that he all swears by.
In everything that we do, we must vow to bring passion and dedication to our craft. Warren Buffet did not enter into investing because of the money alone, but because it is his passion. Doing something that we love instantly makes a difficult job easier. When there is passion, there is also commitment, and Warren Buffet has that. He commits to being better at his craft, and he challenges himself to be more. Let us not limit how high we can fly, let’s soar and reap the benefits of our hard work.
Know When to Stop
Buffet narrates one incident where he went into a race track to bet for a race. He lost in the first round. To reclaim his lost, he then decides to bet for the second time, but still, he lost. He was so devastated that he lost a week’s allowance to gambling. That is when he promised not to repeat the same mistakes again.
Betting and gambling can be a major financial pitfall that is why when the odds are not working anymore, just quit. Don’t let the anxiety and regret of losing the money convince us to try again. Learn and move on from the experience.
One common mistake that we all commit is that we instantly spend the little profit we got, thinking that we deserve a reward. But not for Buffet. He makes sure to reinvest his profit to generate more income. When he was younger, he and his friend purchased a pinball machine and put it in a barbershop. Instead of celebrating their new venture, they decided to save the money and buy more pinball machines. When they finally decided to sell their small business, Buffet used his share to buy stocks and make another business.
Limit the Credit and the Expenses
Warren says that he has never borrowed a significant amount of money to friends and family. He makes sure that he lives according to his means. Borrowing money or owning credit cards may be an instant answer to a financial problem, but it is definitely not the way of being wealthy. Most people overspend when they own credit cards since they cannot assess how much money they really have, and by the end of the month, a huge part of the budget goes to paying credit bills or loans.
Buffet also talks about limiting any unnecessary expenses, especially to those who are just starting up. Be more selective on which to spend on so there’s more money to invest in. For company owners, be vigilant on the little expenditures that the office is paying.
Know the Quality and Price
Buffet swears by being committed to a stock. According to him, people should not own a stock for even 10 minutes if they can’t see themselves owning it for 10 years. Longevity is the key to the stock market, and people should be in it for the long haul instead of always selling and reselling. That is why it’s important that the stock has quality. Look for more established and consistent shares instead of the trendy ones. They start hot but not for a longer term.
Know the Meaning of Success
For Warren Buffet, success is not about how much money he makes or his rank on magazine’s “World’s Richest”. That is why Buffet shares most of his income to charities like the Bill and Melinda Gates Foundation. For him, success is how much people actually love him for who he is, and not because he donated hospitals named after him.
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