If anyone in the world who conquered the mastery of investing and become a world’s richest person list, that person should be called Oracle!
Hope you know whom we are talking about already, yes! well known, Mr. Warren Buffet ($87.1 Billion net worth in 2018), one of the wealthiest person in the world and being in the top richest list consistently for years.
He founded the investment company called Berkshire Hathaway and helped many people become rich with his investment philosophy and strategies. If you haven’t read his famous books “The Snowball: Warren Buffet and The Business of Life “, it is a mind-blowingly well-written book and I would suggest reading if you plan to become an entrepreneur or investor.
“When a person with money meets a person with experience, the one with experience ends up with the money and the one with money leaves with experience.”
In these past 40- years Mr. Buffet thought us many things like being simple life even if you are a billionaire, make some good habits and follow till the end, and many more, which we have listed in this article. So let’s get dive into the Lessons You can learn from Warren Buffet about Investing!
Table of Contents
- Life Lessons from Warren Buffet
- 1. Start Investing in Yourself first
- 2. Learn from your Mistakes and Move On
- 3. Diversification isn’t always a good idea
- 4. Trust Yourself
- 5. Invest What You are comfortable with it
- 6. Focus on What Matters, Eliminate the Unnecessary
- 7. Take Ownership of your Investment
- 8. Don’t be a day trader
- 9. Don’t ignore the value of intangible assets
- 10. Be fearful when others are greedy, and greedy when others are fearful
Life Lessons from Warren Buffet
1. Start Investing in Yourself first
Before start thinking about making money, it’s important to develop your skills and upgrade your attitude for know what’s right or wrong. Learn each day and teach something to someone.
Just focusing on making money never going to work unless you develop your skills according to the current and future market. Put yourself first and Build a career that makes you shine always.
2. Learn from your Mistakes and Move On
Learning is one of the mandatory skill if you ever want to be a successful entrepreneur or investor. Mistakes are unavoidable and we should learn to move on instead hanging on it forever.
As Buffet says,
keep a record of your mistakes so you don’t repeat them in the future. Learn and let go!
So make your mistakes early and learn not to do it again. This is the quickest way to reach the successful life.
3. Diversification isn’t always a good idea
You may heard many investors telling you to diversify your portfolio so the risk factor is less. But Buffet not agreeing with it and say’s “not a viable investment strategy”.
If you really think you are a good investor, you should always look for long term benefit with few stocks as possible. Always keep faith in your investment which is more important for a start.
“When it’s raining gold, put out the bucket, not the thimble.”
4. Trust Yourself
In the era of fake news and social media data selling happening, we all get confused about our decisions. Everyone right on their opinion, but it should not impact your decision making.
Be true to yourself! Trust your instincts always!
Simple advice Buffet gives to his peers to overcome their fear and not to pay attention to what others are telling you or think about you!
5. Invest What You are comfortable with it
You can be the richest person on earth but you can’t able to drive an airplane without acquiring the skill to drive a plane. So learning what is your strength and weakness can clear your path for the right goal.
It’s absolutely important what you are into before pouring your hard earned money. People make this mistake often to be rich quickly. Understand it’s future growth and learn how to mitigate the risks on the way.
6. Focus on What Matters, Eliminate the Unnecessary
This is one of the best investment tips from Warren Buffet is not focus on everything but what really matters to your life and growth. A great example is our daily news, which comes with so much information that will not use for us, which can waste our time and energy.
Buffet says people tend to overreact most of the time, so he suggests to follow the 99-1 rule, where most people make decisions based on 1 % financial news they consume. Becoming an expert in investing game, you should learn to avoid unnecessary details, but look for what will help to achieve your goal. This is one of the best life lesson from Warren Buffet that we can apply in our life.
7. Take Ownership of your Investment
Buying stock from a company is not just grow your wealth, but be part of that company as well. Most investors will forget that they are part of a company they invested in.
You need to think about the market, and demand for the future, just like the people who work in that company. invest yourself with your money!
8. Don’t be a day trader
Buffet says the secret to getting the best return on your investment is to buy-and-forget about it. Day trading can give you short term return but you are playing with higher risk. So HODL for the long term, even after a decade it may return with good profit.
This is one of the best investment lesson from Warren Buffet that he followed every day.
9. Don’t ignore the value of intangible assets
In every company, there are tangible (Factory, machinery, capital) and intangible assets (Brand awareness, reputation, and trust). Buffet believes that in coming years Intangible assets will be a major factor considering your investment strategies.
“I was taught to favor tangible assets and to shun businesses whose value depended largely upon economic Goodwill,” he wrote in 1983. “This bias caused me to make many important business mistakes of omission, although relatively few of commission.”
As Buffet says, Even if the company goes down for temporary reasons, its goodwill play a pivotal role to gain its moment in the future.
10. Be fearful when others are greedy, and greedy when others are fearful
Last, his famous philosophy on when you should be greedy and when yu should not is a best investment advice to take on.
In the year of 2008, the financial crisis killed a lot of business and people lost so much money. But Buffet saw an opportunity and bought major retail stocks for the lowest price. He got richer when the market got back on its feet again after a year.
Save your money in peacetime, so you can but more during the war.
Reading more about Mr.Warren Buffet will be a great lesson for anyone who wants to start a company or invest in stock. His life lessons are more practical than any business man on earth. Hope these 10 lesson from Warren Buffet will help you live a purposeful life and see the future differently.
So, which one is your favorite Buffet financial tips and life quote, just comment below in the box.
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