Investment advice from Warren Buffett can really come in handy when you’re trying to save money and make money for the first time in your life.
For all baby boomers, Buffett’s a household name. For most young people today you may recognize the name but most likely don’t know of the man’s accomplishments. Warren Buffett is one of the most respected 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 because I wanted to focus on investment tips and stock market basics from Warren Buffett instead. If you would like to know more about Warren Buffett then I recommend reading one of the many biographies written on him. The most recent autobiography book done on Buffett is written by author Alice Schroeder entitled, “The Snowball: Warren Buffet and the Business of Life.”
How does this all tie in? Schroeder conducted an interview with Parade Magazine in September of 2008 where she released 10 strategies that Mr. Buffett himself stated were his best tips for those looking to invest in the stock market or to make more money in general.
When it comes to Warren Buffett’s quotes on investment tips and advice, what can you apply to your own life?
Reinvest your profits back into the stock market.
Just because you make a wise investment and get some profit out of it, you shouldn’t immediately take that profit and go splurge the money. The goal is to retain your profit, reinvest it, and allow compound interest to work its magic over time. Reinvesting your profits will allow you to keep on making money on your money. There’s no sense in giving up too early according to Buffett.
Be willing to be different with your business and the way you live life.
A popular Warren Buffett quote or saying is to be bold when others are intimidated. Buffett has always supported the idea of being different from the group. For example, if all of your friends are going to University to earn degrees in a Science related field, then be the one that tries something totally different. Do something that none of your friends would have thought of doing. You don’t even have to go to college right out of high school. You can learn how to start a business with no money or travel the world for a year.
Never suck your thumb.
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. Buffett feels that you need to seize the moment as often as you can if you want to be successful as an investor or small business owner.
Spell out the deal before you start.
Never get into any investment or any contract before knowing 100% that you’re comfortable with all of the possible outcomes. Please remember that the only guarantees in life are death and taxes. If you want to get rich fast with some scheme where you make a million dollars over night, you’re getting to get burned real quick. There’s no easy way to get rich fast in this world.
Watch your small expenses.
When you learn how to live within your means, you’ll quickly find yourself saving more money than ever before and being much happier overall. Starting off with finding a free checking account and then moving towards preparing your own food, is the easiest way to watch those small expenses that creep up.
Limit what you borrow.
When you borrow money from another person or a bank, you’re on the hook to pay them back. Borrowing money is a serious financial commitment. As tempting as it might be to borrow money to invest it, you need always consider how you plan on paying this money back. Warren Buffett wouldn’t be known as a great investor if he maxed out his debt and wouldn’t be able to pay it off.
Be persistent.
Persistence is key. Nothing good will every come easy. The only easy money comes when 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.
Know when to quit.
If you strongly believe in what you’re doing then you should never quit. On the flip side, if you’re 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.
Assess the risks of every investment that you make.
Going to university is one of the greatest investments a young person could make. College can also be one of the worst investments. Don’t go maxing out your student loans and credit cards to attend a school or program unless you’re 100% confident that you’ll excel in the chosen area. School isn’t the only risk. Warren Buffett applies this investment advice to others areas of life, including, stocks, real estate, and time.
Know what success really means to you.
Everyone has different goals in life. 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.
At the end of the day, if you choose not to listen to me, then I strongly recommend you to listen to Warren Buffett because after all he has more money than most of us combined.