6 Times Warren Buffett Wowed Us With His Financial Advice

Friday, August 27, 2021


Warren Buffett has made more money than any other investor in the history of investing. He began with a small sum of money early in his teens and grew it into a fortune by the time he was in his thirties.

But how was he able to do it? He did it by following his own sound advice. And you can learn from it too. Here is some of his best wisdom.

Don’t Lose Money

Unsplash - CC0 License

It sounds simple - even child-like - but there’s a lot of wisdom to the adage (don’t lose money).

Losing money is a disaster. Not only do you deprive yourself of funds today, but you also reduce your long-term wealth potential. You have less money in your account to generate compound interest for your retirement.

Buffett says that if you are working from a loss, it is much harder for you to find your way back to where you started. It is much better to invest in assets that you know are going to generate value over the long-term.

Invest In Yourself

What is the most valuable thing you own? If you ask Warren Buffett, it isn’t your house or your car: it’s your mind. Therefore, he suggests that everyone invests in themselves. You can dramatically increase your long-run wealth potential if you have skills, talents and abilities that other people value.

Learn About How Money Works

You also need to become financially literate and educate yourself on how money actually works. Money isn’t as mysterious as many people think. In fact, once you understand concepts, such as compounding, you quickly see how some people are able to get so wealthy.

View Money As A Long-Term Game

Warren Buffett spent his whole life building his fortune. It didn’t happen overnight. That’s why everyone should begin early, no matter how small their savings might be.

Many people get a small business retirement savings account from Accuplan. The idea is to allow their money to accrue over a lifetime so that they have funds to support themselves when they retire. Buffett refers to this as similar to getting the “shade of a tree planted a long time ago.”

Don’t Get Into Debt

Buffett is also a big advocate of staying out of debt if you possibly can. He says that he has seen more people fail because of leverage (borrowed money) than he has liquor.

But why is this? It’s because debt compounds as well. The more you have, the more burdensome it becomes, and the longer it takes to pay it off.

Buffett suggests that people avoid credit cards altogether. Many have interest rates of 20 percent which is more than even the most skilled investors can generate from their portfolios long term.

Buy Value

Lastly, Buffett says that you should buy any assets at a low price. If you pay a higher price than the underlying value of the asset, you will lose money guaranteed. If you buy at a lower price, you’ll eventually make money once the market moves towards fair value.

Photobucket Photobucket Photobucket Photobucket photo googleplus.png

No comments:

Post a Comment

I love reading and responding to comments but in order to get my reply you must ensure you are NOT a no-reply blogger. If you are, here are some quick steps to change that!

1. Go to the home page of your Blogger account.
2. Select the drop down beside your name on the top right corner and choose Blogger Profile.
3. Select Edit Profile at the top right.
4. Select the Show My Email Address box.
5. Hit Save Profile.