Investing: 7 investment tips from warren buffet

Warren buffet

War­ren Buf­fet is one of the rich­est men in the world. He is a sea­soned investor who has made a name for him­self. he is focused (you have to be to become on of the most suc­cess­ful peo­ple on the plan­et) and he knew exact­ly what he want­ed. Through­out his life Mr. buf­fet has taught some valu­able invest­ment lessons which we can learn from if we want to achieve finan­cial suc­cess. With­out fur­ther ado lets talk about these sev­en tips from war­ren buf­fet that are sure to lead you to invest­ing suc­cess.

Cash is a bad investment over time

This might sound like a para­dox to the new investor but it makes sense. When you look at the his­to­ry of cash it tends to lose its val­ue over long peri­ods of time. You don’t want to invest 10 dol­lars and end up with 8 dol­lars. No investor wants to lose mon­ey. That would be like a reverse invest­ment. Accord­ing to cash may pro­vide the income you seek but its val­ue is undone by infla­tion. This means that the pur­chas­ing pow­er is erod­ed over time.
This is not to say that you shouldn’t have cash invest­ments it’s just a way of look­ing at cash invest­ments. The issue of real impor­tance is pur­chas­ing pow­er. Because no mat­ter how much mon­ey you have if it takes more and more mon­ey to buy the same thing over time you are los­ing mon­ey.

The best investment you can make is in yourself

Your knowl­edge and expe­ri­ence will be the great­est invest­ment you can make in your life. you are the head of your busi­ness and it is your guid­ance and exper­tise that will deter­mine if you achieve suc­cess or face fail­ure. when you invest in a skill that will help you in your busi­ness it has the poten­tial to earn you thou­sands if not mil­lions of dol­lars in the long run.
like going to school will get you a job. Invest­ing in a busi­ness course can help you to be more effec­tive in run­ning your busi­ness and pro­vide more val­ue to your cus­tomers. remem­ber you can­not pour from an emp­ty cup you need to invest in your­self so you can grow and devel­op. Also before you can invest in any­one else.

Don’t buy the stocks of a business you don’t understand

Let’s face it buy­ing stocks is exact­ly like gam­bling. espe­cial­ly if you don’t under­stand the mar­ket. a smart man does not throw mon­ey to the winds and hope for a return on invest­ment . he makes cal­cu­lat­ed risks to ensure that he opti­mizes his changes of mak­ing bank. Now if you don’t under­stand the stocks of a busi­ness that you are buy­ing into, it’s kin­da like buy­ing the lot­to. Sure you might win but the odds of that hap­pen­ing are like the odds of you get­ting hit by light­en­ing twice.
Avoid invest­ments that are too com­plex. You should not be try­ing to mean­der the halls of a labyrinth to under­stand a busi­ness. In fact war­ren buf­fet states that you should nev­er invest in a busi­ness you don’t under­stand. The more com­plex the busi­ness the hard­er it is to under­stand.

Invest for the long term

Short term returns are good but true investor are in it for the long game. You don’t want to make mon­ey the first 6 months then have it all dis­ap­pear. When it comes to stocks war­ren buffet’s favorite word is “Hold”, as in that Ken­ny Rogers song “you’ve got to know when to hold em”. but this time there will be no fold­ing. War­ren buf­fet has stat­ed that if you’re not even think­ing about owing a stock for ten years don’t think about own­ing it for ten min­utes.
What he means by this is you must always think about the long game. Stocks rise and fall you should invest your mon­ey into some­thing that will stand the test of time.

Trust yourself

If you know what you are invest­ing in and your in it for the long haul. There should be no rea­son for you to doubt your­self. Trust that you have what it takes to make the right deci­sions when it comes to invest­ing whether stock or oth­er­wise. If you are con­stant­ly doubt­ing your­self there is no con­vic­tion. There is no sure­ty and have you ever met a suc­cess­ful per­son who was not sure of them­selves?

Never compromise business quality

Busi­ness qual­i­ty is what keeps your cus­tomers com­ing back time after time. Qual­i­ty stands the test of time. It is what will deter­mine the sus­tain­abil­i­ty of a busi­ness. if peo­ple don’t get qual­i­ty ser­vice they go for a dif­fer­ent com­pa­ny, same thing hap­pens when a product’s qual­i­ty is poor. with qual­i­ty you can build brand loy­al­ty. The more con­sis­tent your qual­i­ty the more sus­tain­able the busi­ness.

Know the difference between price and value

Price is tem­po­rary, val­ue is long term. By know you should know as an investor you should always be think­ing long term. It is said that price is what you pay, val­ue is what you get. there are times when stock prices have lit­tle o know reflec­tion on the long term vale of a com­pa­ny and as an investor it is impor­tant to know that. val­ue is often sub­jec­tive, dif­fer­ent peo­ple per­ceive dif­fer­ent things to have dif­fer­ent val­ue. Say for exam­ple you have a pet cat for years and you have so many expe­ri­ences with that pet. If it died and you got anoth­er pet, the new pet would seem less valu­able to you. You would love the pet but it wouldn’t be the same as hav­ing your old pet back. I hope this made sense.
I hope you learned some impor­tant invest­ing tips. You can also leave a com­ment below and let me know what you think did you find this post insight­ful do you have any­thing else to add? if you are con­sid­er­ing start­ing invest­ments, stop con­sid­er­ing and just start. The ear­li­er the bet­ter. invest­ing is like plant­i­ng a seed. the mus­tard seed is small yet it grows into a huge tree. This can be com­pared to Invest­ments they can start small and have a snow­ball effect. Also you will be glad you did. Until next post stay focused.
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