Warren Buffett Money Making Tips
If you don’t know who Warren Buffett is – he is considered one of the best investors in history and is currently worth more than $90 billion, making him the third richest person in the world.
It’s safe to say he understands money.
But Warren Buffett isn’t so different from the rest of us.
He doesn’t live in a flashy, opulent way although he obviously could. He bought a 5-bedroom house in Omaha, Nebraska in 1958 for $31,000 and he still lives in it today.
So here are 6 money tips from Warren Buffett.
1. PRACTICE GOOD PERSONAL FINANCE HABITS
In 2007 Buffett told a University of Florida audience, “Most behavior is habitual, and they say that the chains of habit are too light to be felt until they are too heavy to be broken.”
We are our habits, good or bad. Apart from bad health habits, bad personal finance habits are the most destructive and long-lasting.
Good personal finance habits are things like creating and sticking to a budget, avoiding high-interest debt, and investing regularly.
2. INVEST IN YOURSELF
“Anything you invest in yourself, you get back tenfold.” Investing in yourself is the only investment you can’t lose with.
One way Warren Buffett invests in his mind is by reading. No matter what you want to learn or improve on, there is a book that can help you.
Warren Buffett says he used to read between 600-1000 pages a day when he started his investing career. And he still spends most of his day reading.
When asked why he reads so much, he said, “That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
3. PLAY THE LONG GAME
Although not the original source for the quote, Buffett has been known to use the old adage, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Growing wealth does not happen overnight. It takes time and patience.
Warren Buffett built 99% of his net worth after his 50th birthday.
As he says, the stock market is a device to transfer money from the impatient to the patient. Many people emotionally-invest because they see a stock soaring, and then they panic-sell when the stock comes down. Don’t do that. It’s emotional investing, and it’s a fast road to broke.
Instead, you should buy for the long term to mitigate your risk.
Good things take time, and everyone has to start somewhere.
4. LOOK FOR VALUE
“Price is what you pay; value is what you get.”
If you buy the cheapest vacuum cleaner available and have to replace it six months later because it crapped out, was it a good value?
Probably not. It was merely a good price.
That doesn’t mean you have to have the top of the line vacuum either. There is a happy medium between the least expensive item and the most expensive and that middle ground is often where you can find real value.
5. KEEP CASH ON HAND
“We (Berkshire Hathaway) always maintain at least $20 billion and usually far more in cash equivalents.” Okay, $20 billion is a lot of money. But you don’t need a billion dollars to follow this advice.
What Warren is telling us is that we need an emergency fund.
An emergency fund can keep you out of the frying pan and the fire. The ideal emergency fund contains six months’ worth of expenses.
Yes, that’s a lot of money but be ready for the worst. You need an emergency fund.
Should something catastrophic happen, like a job loss, you can live off your emergency fund instead of your credit cards.
6. BE GENEROUS
“If you’re in the luckiest one percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.” Warren has walked the walk in this regard.
He has given away billions of dollars’ worth of his own shares in Berkshire Hathaway to a variety of charities.
And you don’t have to be in the 1% money bracket to help others or be generous.
Be generous with your time, your kindness, your knowledge, and your skills. There is someone out there whose life you could change.
Above have those rules which are followed by Warren Buffet ( Great investor of the earth ). He shared these secrets with other people and now I’m sharing his secret with you. Because you are here so you want to be rich if you weren’t then why you are here. But if you follow these rules then Definitely you will be Rich.
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