The term ‘money is controversial. It is universally accepted. It is the universal language everyone understands. Interestingly, the saying that money is the root of all evil may sound familiar. But in essence, the lack of it is the evil itself. The wealth gap and quality of living among the “Have and Have Nots” keeps widening over time, and there are no signs of regression. Interestingly, everyone can be wealthy if only the right investments are made. Let’s know 10 Best Money Advice Warren Buffet all-time.
Why should Warren Buffet be heard?
Well, if you are not conversant with the nickname; Oracle of Omaha, Berkshire Hathaway, or Coca-Cola, and the Stock Market might ring a bell. Warren Edward Buffet is a Philanthropist, Business mogul, and seasoned Investor. He was born on 30th August 1930 in Omaha, Nebraska, in the United States. He is one of the most successful investors in history.
10 Best Money Advice Warren Buffet of all time.
This list compiled in no particular order holds nuggets of wisdom to be applied not just to finances alone but to your daily life to experience tremendous value for what investments you delved into. It isn’t easy to sum the nuggets in 10 points, but we can try. First,
1. Invest in yourself: Knowledge of self is powerful. The investment in one’s self will yield tremendous inexhaustible ROI.
2. Form Healthy money Habits: Old habits die hard, including good ones like Saving. Paying closer attention to your finances is an excellent way to grow. Avoiding harmful money habits is essential.
3. Always Keep cash at Hand: Berkshire Hathaway’s emergency fund of at least $ 20 billion and huge reserves of cash equivalents have a purpose. These reserves helped the company stay afloat during the recession while other businesses crashed. There is something to take home there. Always have emergency funds stacked.
4. Invest in what you know: It is a bit of simple but powerful advice. Buffet says, “Never invest in a business you cannot understand”. Why is this so important? Just like moving from Point A to Point B, with the proper knowledge of the tools to navigate your desired destination, clarity of purpose, time, effort, and resources will be minimized.
The golden rule is that if an investment cannot be explained in elementary terms in less than 7 – 10 minutes, you are up for a complex situation. Such an investment goes against the advice of Buffet. In-depth knowledge of a business can give an insight into the trajectory of the market sector over time and your investment potential. For example, knowledge of the internet and its potential in the early 2000s would reap immense fortune today if the investment was planted. Stay clear of complex get-rich-quick investing bubbles you cannot understand. They burst bad and ugly.
5. Avoid Debt (Especially credit card debt): This is pretty concise and direct; as much as possible, avoid debt and those plastic cards.
6. Never water down on Business Quality
“It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. This statement was inspired by Berkshire’s initial venture in the textile industry, believing that cheap businesses will eventually yield decent long-term profit. But owning and running such ventures even when it runs at a loss is foolish unless you buy these ventures to sell. So when purchasing stocks, for instance, instead of buying cheap, it is profitable to buy from companies reputed to profit at a cost provided they provide quality service.
7. Buy to hold forever: Sounds weird but here is the trick the plan is to keep stock as long as it takes. Buffet’s quote says, “if you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes”. So first, before you buy, you need to ensure that your portfolio has potential compound earning value, then concentrate your forces to build and hold for a long time.
8. Concentrate your forces: Buffet said, “Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing. “.As much as this stock or that stock is hot in the market, as the oracle says, portfolio diversification creates diluted and scattered resources in businesses with low-quality potential. He believes in the concentration of significant equity holdings with long-term value, laudable and competent management, and a business that can be understood.
9. Investing is not rocket science: Yup! Investing is not a game of the guy with a high IQ takes it all. But, as much as it is not rocket science, it is not a walk in the park either. Although there are no ebbed-in-stone principles to beat the market, Buffets says it doesn’t work that way.
10. Give, Give, Give!
There is this saying that when you give you receive. Buffett has donated over $3 billion to charitable causes and has pledged to give his wealth away. This is a powerful gesture that can be adopted in your capacity.
Conclusion
An investor can make foolish investment decisions. To avoid such, just as it seems fit to get accurate information it only makes sense to take fish advice from a fisherman, medical prescription from a doctor, and money advice from a financial expert with a track record of wealth and asset generation. The oracle has spoken. He who has an ear let him hear.
Frequently Asked Questions (FAQs)
1. Question: How much is Buffett’s net worth?
Answer: As of March 2022, he is worth $117billion.
2. Question: Does Buffet own Coca-Cola?
Answer: His company owns a 10% stake worth over $22billion.
