Most people try to invest and make money, but they often end up losing money by making the same mistakes over and over again. Budding investors should try to learn and emulate the mindset of wealthy people like Bill Gates, Mark Zuckerberg, Michael Dell, and Warren Buffet. Let’s focus on Warren Buffet, who has been described as the best investor on the planet. Here are some of the investment advice he sticks to:
1. Develop your investment mind
Not all people are business-oriented, but we can improve our entrepreneurship by reading business-related books. Warren Buffet invests a lot of his time studying business-related books.
2. Practice patience in your investments
Every time Buffett buys a stock, he buys in the company. This means that he does not sell the shares every time the market rises or falls. He believes in companies he invests in for the long term and holds the stocks until he believes or sees value in those companies. One of Buffett’s famous quotes, which exemplifies his penchant for long-term investments, is: “No matter how impressive the ability or effort is, some things just require a large investment. . “
3. Prioritize value
Sometimes the amount we spend on something and the value we get from our purchase are unrelated. Buffett believes investors need to understand that markets are driven by supply and demand, and buying a company with solid growth during market downturns is a great opportunity to gain value. Buy good stock at a great price.
4. Check your emotions when you invest
Human emotions influence the market considerably more than any monetary model. Emotions can give people hope for something that has never happened or that rarely happens. Buffett recommended that controlling your emotions is considerably more imperative than your IQ. According to him, “Success in investing is not associated with IQ. What you need is behavior to control the urges that harm other people when they invest ”.
5. Invest in what excites you
Buffett urges that you “never put resources into a business that you don’t get”. Don’t invest money in companies whose business you don’t understand.
If you don’t have adequate information about a business, it is much more difficult to understand how a business will perform in the long run and predict what the business will become in a few years.
6. Live below your means
Despite having a net worth of $ 87 billion, Buffett lives in a surprisingly modest home. He bought his current home in Omaha, Nebraska for $ 31,500 in 1958 and today he calls it the 3rd best investment he has ever made. Rather than wasting money on living lavishly, Buffett lives sparingly and has reaped the rewards.
7. Save first then spend the rest
People tend to pay their bills first, spend the rest, and save for the end. According to Buffett, this is the wrong approach. Buffet prescribes that you must first set aside a set amount of money each month as savings, then pay your bills, then spend whatever is left after paying the bills.
8. Remember your roots
When he was in college, Buffett got a job as a newspaper delivery boy delivering the Washington Post. He broadened this first activity into a deeply rooted association with everyday life. Years later, his company, Berkshire Hathaway, became the Washington Post’s biggest investor. Remember where you are from, your values, and you may discover unique opportunities for great investments.