Most people try to invest and make money, but often end up suffering losses by making the same mistakes over and over again. Aspiring investors should try to learn and emulate the mindset of rich 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 tips he adheres to:
1. Develop your investment mindset
Not all people are business oriented but we can improve our business mind by reading business related books. Warren Buffet spends much of his time studying business-related books.
2. Practicing patience in your investments
Every time Buffett buys a stock, he buys a piece of the company. This means that he doesn’t sell the stock at every market boom or bust. He believes in the companies he invests in for the long term and holds onto the shares until he no longer creates or sees value in these companies. One of Buffett’s famous quotes, illustrating his penchant for long-term investing, is: “No matter how amazing your skills or efforts, some things simply require a significant investment. You can’t create a child in a month by leaving nine women pregnant. .”
3. prioritize value
Sometimes the amount we spend on something and the value we get from our purchase are not related. Buffett believes that investors need to understand that markets are driven by supply and demand and that buying a company with strong growth during market downturns is a great opportunity to gain value. Buy a good stock at a great price.
4. Check your emotions when investing
Human emotions influence the market considerably more than any monetary model. Emotions can make people hopeful for something that never happened or rarely does. Buffett has recommended that controlling your emotions is considerably more imperative than your IQ. According to him, “Success in investing is not related to IQ. What you need is the behavior to control the impulses that cause harm to other people in investing.”
5. Invest in what you know and are passionate about
Buffett urges “never put resources into a business you don’t get.” Don’t put money into companies whose business you don’t understand.
If you don’t have adequate information about a company, it is much more difficult to understand how a company will perform in the long term and to foresee what it will become a couple of years from now.
6. Live below your means
Despite 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, calls it the third best investment he’s ever made. Instead of spending money to live lavishly, Buffett lives frugally and has reaped the benefits.
7. Save first and then spend the rest
People tend to pay bills first, spend the rest, and save for last. According to Buffett, this is the wrong approach. Buffett prescribes that you should set aside a set amount of money each month as savings first, then pay your bills, and then spend whatever is left after paying the bills.
8. remember your roots
When he was in high school, Buffett found a job as a newspaper delivery boy at The Washington Post. He expanded that early activity into a deeply rooted association with the journal. Years later, his company, Berkshire Hathaway, became The Washington Post’s largest investor. Remember where you come from, your values, and you may discover unique opportunities for great investments.
