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| Warren Buffet |
Briefly Warren Buffett is Businessman
and investor he was born on August 30,1930, in Omaha, Nebraska. Investing by
age 11, Buffett was running a small business at 13. Buffett later started the
firm Buffett Partnership in Omaha, with huge success. In 2006, Buffett announced
that he would give his entire fortune away to charity (est. $62 bil.), the
largest act of charitable giving in United States history.
When interviewed by Parade Magazine sometimes back Warren
Buffet he revealed the following secrets that can work for you.
Reinvest your profits
When you first start making some money, don’t spend it
all right away. Rather, use it to grow your business and increase your profits.
Be willing to be different
Instead of following the herd, Buffet focused on
undervalued investments and beat the market year after year which makes a lot
of sense. It then states, "To Buffet, the average is just that – what
everybody else is doing, don’t just do what everyone else is already doing in
the same way that everyone else is already doing it.
Never suck your thumb
Gather your information and make a decision. Calling
any extra time wasted before making a decision "thumb sucking," the
article states that when people offer Buffet a business or investment, he makes
a decision on the spot. “From my own
experience I have lost a lot of business opportunities due to this.
Spell out the deal before you start
Always agree on the specifics of any deal before
starting on it. Buffet notes that your bargaining position is greatest before
beginning work on a job. So, even with friends and relatives, make sure
everyone understands and agrees to the details of the deal in advance.
Watch small expenses
I think this is what spurs him to recommend low cost
index funds extends far beyond just investing advice. Limiting your expenses in all areas of your
life will extend the reach of your paycheck as well.
Limit what you borrow
Mmh there you are, Buffet has never
borrowed a significant amount of money. His advice is to become debt-free and
then save some money to start investing. This is quite a bit different from all
the gurus claiming that rich people get rich by using other people’s money. “ I like
this”
Be persistent
Buffet claims that someone possessing persistence (and
ingenuity) can win against a bigger and/or more established competitor.
Know when to quit
Sometimes, it is best to just cut your losses and walk
away instead of throwing good money after bad. When you are down, resist the
inclination to win it all back with the next bet.
Assess the risks
The article describes a situation where Buffet advised
his son to imagine the worst-case and best-case scenarios for a certain course
of action. This exercise will help you understand the risks and rewards for
whatever decision you are making.
Know what success really means
The article claims that Buffet does not measure his
success by dollars. Here’s an interesting quote from Buffet: "I know people who have a lot of
money," he says, "and they get testimonial dinners and hospital wings
named after them. But the truth is that nobody in the world loves them. When
you get to my age, you’ll measure your success in life by how many of the
people you want to have love you actually do love you. That’s the ultimate test
of how you’ve lived your life."
I really like what Buffet has to say about personal
finances.
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