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 evalesco.com 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.
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.