Whether you are an experienced investor or have just set off with your first investment plan – it is always good to explore the tips and insights from those investors who have excelled in their life. It not only helps you have a good understanding of the rules but also helps you stay abreast of them as they change.
In this section, we have listed down 5 pieces of investment advice from one of the most respected investors of our time - Warren Buffet. A legendary investor and a self-made billionaire, his teachings can help you build wealth in a more disciplined way.
Mr. Buffet once said: "Do not save what is left over after spending but spend what is left after saving”.
So as a thumb rule, put aside a set amount from your monthly paycheck, and outline how your expenses measure up to your income. Once you have your data, you will be able to cut down on unwanted expenses. This practice will significantly reduce nasty surprises when you have a look at your credit card statement or account at the end of the month. Moreover, it will help you reach financial goals easily and quickly.
Unexpected expenses like expensive home repairs, major medical bills, loans, etc. can leave you shattered if you are not prepared for it. The situation can rack up debts, derailing your monthly budget or major goals. Hence, always keep enough money in your savings account. It can help you survive in the long run.
Stay invested for a longer term if you want to enjoy the benefits of compounding. The longer is your investment time frame, the more compounding works at an accelerated pace. The benefits from compounding might appear modest at the beginning; however, it accumulates strength with every passing year. Moreover, the money stays invested longer.
Most of the news and headlines are there to generate buzz and trigger emotions. This leads to short-term thinking and over-reaction. Hence, be very selective with the news you choose to listen and learn to distinguish between what is useful and what is crap. As investors, you need to ask yourself if the news item truly impacts your long-term earning power. And if the answer is no, you should possibly do the reverse of whatever the market is doing.
Take some time to invest in yourself. Read some good investing books, take up a course on finance and investing, attend finance-related seminars/webinars, or anything that can set you on the right path to success. No matter, how old or experienced you are - don’t be afraid to explore and spread your wings. Investing in yourself could be your ticket to boosting your knowledge and wealth.
Warren Buffett’s generous financial strategies and advice have worked well for many. Hence do give it a try if you want to move closer to achieving our goals. It will reduce the number of costly errors and help you manage your portfolios in a better way.