Warren Buffett needs no introduction.
He’s one of the richest men on the planet, and known as one of the shrewdest and most successful investors of all time. There’s no doubt we can all learn a thing or 2 from someone this successful.
Lets take a look at 6 different words of wisdom from Warren Buffett that anyone can incorporate into their personal finances and investing strategies to become more successful.
1. Focus on long term success
Buffett has the mindset that lots of investors don’t – thinking long term. Too many investors buy a stock with the hope that it’ll double in price within 12 months so it can be sold, and the next big winner can be found. This simply isn’t the strategy for long term success in the stock market. Buffett is hyper focused on finding and investing in companies that he feels will yield long term results. He has no interest in the latest IPO, or the trendiest stock everyone is talking about online and on TV.
Find stocks that you believe have long term growth potential. It’ll change your mindset, and your success rate.
2. Invest in quality companies
Buffett is solely focused on finding quality companies to invest in. His mindset when evaluating a company is to think as if you’re buying the whole company, not just the stock. You’ll find this mindset completely shifts how you feel about a stock. It makes the investment more personal, and this will lead you to evaluate the company on a much deeper level. Shifting your mindset from only being an obscure stockholder to the sole owner of the business is the mindset that’ll help you find truly great companies.
3. Get in when others are getting out
Whenever there’s a recession you’re bound to hear lots of news about Buffett. In 2008 he invested $25 Billion into the market. He was getting in when the rest of us were screaming Armageddon, and getting out. One of his core beliefs is to buy companies at a discount, and recessions are the perfect time to find quality companies whose stock is discounted. He took advantage of this fact in 2008, and lets look at the results 6 years later as the market rebounds – he’s profited nearly $10 billion!
4. Start investing…yesterday
Buffett got started young, and this was one of the factors that helped him have more success later in life. As a kid he sold chewing gum door-to-door, took a paper route, and even bought his first shares of stock at age 11; all while the rest of us were playing on the merry-go-round. Starting young allowed him lots of years to find success. He also was able to leverage the asset of time, and compounding interest to his benefit.
Starting young is like rolling a snowball down a hill. The longer the hill, the more time the ball has to accumulate snow, and the larger it is when it reaches the bottom. Don’t wait to start investing or getting your personal finances in order. It’ll have a huge impact on your financial success later in life. Don’t procrastinate, start today!
5. Invest in what you know
The great thing about investing is that there are thousands upon thousands of companies to invest in, and lots of different strategies that can all be successful. You should never try to use someone else’s investing strategy, or invest in a stock simply because someone else is. Develop a strategy and plan that fits your personal financial goals, and invest in companies whose business model and industry you’re already familiar with.
6. Challenge yourself to be better
You’ll never find success financially, professionally, or personally if you don’t challenge yourself and hold yourself to a higher level. One of the best ways to do this is to associate with people smarter, and more successful than yourself. As the saying goes, you’re the sum of the 5 people you hang around the most – so make sure those 5 people are all smarter than you!
Author Bio: This article was written by Shelby Nousain, creator of the InvestingTips360 blog. He’s passionate about investing, and helping other new investors learn how to start their journey to investing success, which is exactly what the InvestingTips360 blog aims to accomplish.