If someone in the world has conquered the mastery of investing and become a leader of the richest people in the world, that person should be called an oracle!
I hope you already know who we are talking about! Well, known is Mr. Warren Buffet (87.1 billion dollars net assets in 2018), one of the wealthiest people in the world and for years consistently in the list of the richest people in the world. He will teach you many life lessons worth following.
He founded the investment company called Berkshire Hathaway and helped many people get rich with his investment philosophy and strategies. If you haven’t read his famous book “The Snowball: Warren Buffet and The Business of Life“, it’s a stunningly well-written book, and I would recommend that you read it 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.”
Over the past 40 years, Mr. Buffet has given us many things, such as living a simple life, even if you are a billionaire, picking up some good habits and following them to the end, and much more, which we have listed in this article. So let’s dive into Warren Buffet’s lessons about investing!
Life Lessons from Warren Buffet
1. Start Investing in Yourself First
Before you start thinking about making money, it is important to develop your skills and improve your attitude to know what is right or wrong. Study every day and teach someone something.
If you focus only on making money, it will never work if you do not develop your skills according to the current and future markets. Put yourself first and build a career that will always make you shine.
2. Learn from Your Mistakes and Move On
Learning is one of the mandatory skills if you ever want to become a successful entrepreneur or investor. Mistakes are inevitable, and we should learn to move on rather than cling to them forever.
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 make them again. This is the fastest way to a successful life.
3. Diversification Isn’t Always a Good Idea
You may have heard many investors advising you to diversify your portfolio so that the risk factor is lower. But Buffet does not agree with this and says that this is “not a viable investment strategy”.
If you really believe that you are a good investor, you should always look for long-term benefits with as few shares as possible. Always keep confidence in your investment.
“When it’s raining gold, put out the bucket, not the thimble.”
4. Trust Yourself
In the age of fake news and selling social media data, we are all confused about our choices. Everyone has a right to their opinion, but it should not influence your decision making.
Be true to yourself! Always trust your instincts!
This is simple advice that Buffet gives to his peers, to overcome their fear and not to pay attention to what others tell you or think about you!
5. Invest In What You are Comfortable With
You can be the richest person in the world, but you can’t fly an airplane without acquiring the ability to do so. So if you learn what your strengths and weaknesses are, you can pave the way to the right goal.
It is absolutely important to understand what you like before you spend your hard-earned money. People often make this mistake to get rich quickly. Understand its future growth and learn how to reduce the risks along the way.
6. Focus on What Matters, Eliminate the Unnecessary
This is one of Warren Buffet’s best investment tips: don’t focus on everything, but on what is really important for your life and growth. A great example of this is our daily news, which comes with so much information that is not useful to us and can waste our time and energy.
Buffet says that people tend to overreact most of the time, so he suggests following the 99-1 rule, according to which most people make their decisions based on 1% of the financial messages they consume. When you become an expert in the investment game, you should learn to avoid unnecessary details, but look for what helps you achieve your goal. This is one of Warren Buffet’s best life lessons we can apply to our lives.
7. Take Ownership of your Investment
Buying shares in a company does not only mean to increase your assets but also to be part of that company. Most investors will forget that they are part of a company in which they have invested.
You have to think about the market and demand for the future, just like the people who work in this company. Invest your money properly!
8. Don’t Be a Day Trader
Buffet says the secret to getting the best return on your investment is to buy it and forget it. Day trading can give you a return in the short term, but you are playing with a higher risk. So hold for the long term; even after a decade, it can come back with good profits.
This is one of the best investment lessons Warren Buffet has been following every day.
9. Don’t Ignore the Value of Intangible Assets
In every company there are tangible (factory, machines, capital) and intangible assets (brand awareness, reputation and trust). Buffet is convinced that in the coming years, intangible assets will be an important factor in 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 under for temporary reasons, the goodwill of the company plays a decisive role in winning its moment in the future.
10. Be Fearful When Others Are Greedy, and Greedy When Others Are Fearful
After all, his famous philosophy about when to be greedy and when not is one of the best investment recommendations to take.
In 2008 the financial crisis killed many companies and people lost so much money. But Buffet saw an opportunity and bought large retail assets at the lowest price. He got richer as the market rebounded after a year.
Save your money in peacetime so you can save even more during the war.
Reading more about Mr. Warren Buffet will be a great lesson for anyone who wants to start a business or invest in stocks. His life lessons are more practical than any businessman in the world. I hope these 10 lessons from Warren Buffet will help you live a purposeful life and see the future differently.
What is your favorite Buffet financial tip and life lesson? Just comment below in the box.
Read Next : 30 List of Best Work from Home Job Ideas In 2019