9 Decades of Money Wisdom from Warren Buffet
The world famous investor Warren Buffet turned 90 years old.
He’s been called the oracle from Omaha. He grew up in a middle to lower income family. As a young man he wanted to be wise with his money and grow his money to a large amount.
Well by sticking to his goals and some smart money tips he created, he was able to become one of the wealthiest people in the world.
Now maybe you don’t want to be a billionaire, but I’ll get you’d like to have more money than you have now so I’ve put together 5 principles of wealth from Warren Buffet that you can use and live by.
1. Invest in yourself.
What do I mean by that? Buy books, attend seminars, put in the time to make yourself more valuable to your marketplace. This could be getting a school degrees or becoming self taught through reading and a good mentor. But you must invest time and money into your future if you want to have more. A mentor of mine named Jim Rohn once said , you can have more because you can become more.
2. Be rational with your money and not emotional. When things go right with our money, we tend to pat ourselves on the back as if we were a genius. When things go wrong with our money we become emotional and panic
When it comes to investing, you need to let knowledge and math guide your money decisions and not your fear or emotions. Markets will go up and down. Stock prices will go up and down. Interest rates will go up and down. This leads me to the next smart money tip from Warren Buffet
3. Understand where is best for you to grow your money. For example if you want nothing to do with PE ratios, buying stocks at a discount or catching the next Amazon or Tesla, then Buffet recommends the indexing strategy.
This is where you link your money to an index such as the dow jones or S&p 500. These are groupings of companies. Your money is essentially tied to many areas of the US or world economy so you aren’t just dependent on one company. You rise and fall based on many different companies. I discuss this idea in great detail in my book Taming Wall Street.
4. Think long term. I’ve had so many people tell me they want to be rich like Warren Buffet and retire early. I have to remind them he is 90 and still goes to work. Be a long term thinker. Buffett says don’t buy a stock for 10 minutes if you wouldn’t hold it for 10 years.
Buffett likes to buy companies he believes will be around for a long time. Industries that can grow into their space and expand their value and offering over time.
For example Buffet bought coca cola back in the 80’s and his company still holds that stock.
Too many times people want to be day traders but the truth if most of us work full time during stock trading hours and don’t have time to babysit our money. We need to put our money into an investment we feel good about long term.
5. Money isn’t everything. Money can do a lot of things but it shouldn’t be our only pursuit in life. It’s a vehicle to enjoy life in the future or cover emergencies. When it becomes your only focus in life, you become unbalanced and unhappy. Plus if all you think about is money, you are poor because it takes away from other enjoyable areas of this life.
Well these are Warren Buffet’s best ideas of building wealth. He’s certainly played a role in my life, especially with the indexing and thinking more long term.
How has Warren Buffet played a role in your life or are you new to learning who he is? Let me know in the comments.