For all baby boomers, he is a household name, however, for most young people today you may recognize the name but most likely do not know of the man’s accomplishments. That man is none other than Warren Buffet, one of the greatest investors of all time and a man who has been at the top of the richest people list with Bill Gates for many years. This article is not a biography, but if you would like to know more about Warren Buffet then I recommend reading one of the many biographies written on him. The most recent autobiography book done on Buffet is written by author Alice Schroeder entitled, “The Snowball: Warren Buffet and the Business of Life.” Schroeder conducted an interview with Parade Magazine in September of 2008 where she released 10 strategies that Mr. Buffet himself stated were the reason he is where he is today. The point of this article is to display these 10 strategies and show how young people today can apply them to attaining a successful life with financial independence. The strategies have been simplified to a very common sense approach that all young people can relate to.
1. Reinvest your profits. Just because you make a wise investment and get some profit out of it, do not immediately take that profit and go splurge. The goal is to retain your profit, reinvest it and allow compound interest to work its magic over time.
2. Be willing to be different. If all of your friends are going to University to earn degrees in a Science related field, then be the one that does their own thing. Do something that none of your friends would have thought of.
3. Never suck your thumb. I am going to have to steal a line from the Sopranos for this one, “More mistakes are made from indecision than bad decisions.” You must be able to think rationally and quickly, so that good opportunities do not pass you by.
4. Spell out the deal before you start. Never get into any investment or any contract before knowing 100% that you are comfortable with all the possible outcomes. Please remember that the only guarantees in life are death and taxes, not any scheme where you make $2million over night and all you got to do is give some random guy $500 of your own money.
5. Watch small expenses. Even if you save on the big ticket purchases, this does not give you a free pass to blow pocket change every day. The lattes, energy drinks, steak dinners, and random nights drinking add up.
6. Limit what you borrow. Please do not ever buy a house or condo with no money down. Also just because you got a student loan do not think that this is free money, you have to pay it back, so getting more money may be beneficial when you are in school but then good luck paying it off when you have graduated.
7. Be persistent. Nothing good will every come easy, unless you speak to someone that has inherited or won money. The rest of the population has worked hard for their money and never gave up.
8. Know when to quit. If you strongly believe in what you are doing then you should never quit, however, if you are the only person on the whole planet that thinks your idea could work and you have lost a fortune then maybe you should cut your losses. Everyone makes mistakes, the only thing that separates the rich from the poor is that they learn from their mistakes and use them as an opportunity to grow.
9. Assess the risks. Going to university is one of the greatest investments a young person could make, it is also one of the worst. Do not go maxing out your student loans and credit cards to attend a school or program unless you are 100% confident that you will excel in the chosen area. Do not go enrolling yourself in an expensive program at an expensive university unless you are willing to do the work, if not, then imagine how your life would be without a degree and thousands of dollars in student loans because you did not put the proper effort in.
10. Know what success really means. Everyone has different goals in life, just because your friends or parents push you to become rich, you may not want to. You may choose to measure success by the people you have in your life. Others will solely base their success on the size of their bank accounts. Everyone is different, so strive to reach your own level of success, whatever that may be.
You definitely do not have to listen to what I have to say because after all I am not no billionaire or a millionaire, I am just a young person working on my finances. If you choose not to listen to me, then I strongly recommend you to listen to Warren Buffet because after all he has more money than most of us combined.