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 Few understand savvy money management like Warren Buffet. Fortunately, Buffet likes to share much of his knowledge with the rest of us little people, and his advice often comes for free. We have five of Warren Buffet's best money tips right here so you can begin capitalizing on the success of an investor who does it better than just about anyone else in the world.
We Have Nothing to Fear…
Actually investors tend to be a skittish bunch, but Buffet says the fear you smell in other can translate into big earnings for you. When others are shying away from the market, fearful of a downturn, that is the time when you can sneak in and snatch up some serious bargains. Buffet says the best investment strategy is to stick your nose to the grindstone and forge ahead, even when others are fleeing with fear, for best results put your money in an isa.
Keep Your Sights Set High (and Long)
Long-range goals – really long term, such as 15-20 years – help you to focus on the big advantages that you can enjoy by sticking with your investments. Long-term investments can handle the dips and rises common in the market so you can shoulder a bit more risk without worry. Forget those who are focusing on a single term or even one year – set your sights much longer, and you will be able to ride the stock market roller coaster much more calmly than your cohorts.
Work within Your Knowledge Base
It may not seem particularly glam or exciting, but investing in what you understand is the first step in maintaining good control over your investment portfolio. Your neighbor or best buddy may be quick to snatch up the next great thing and entice you to do the same. However, if you don't get how the investment operates, it is best to pass in favor of options that are easier for you to understand.
Save for a Rainy Day
Everyone needs a cushion to provide financial security and peace of mind. The question is how much it will take to help you sleep like a baby at night. For Buffet, that means keeping about $20 billion completely liquid in case of a financial emergency. While most of us do not have that type of savings account, a general rule of thumb is to keep six months of salary in a savings account. Once you have determined the amount you need, begin the arduous process of saving until you reach your goal.
Take Responsibility
No matter where you get your investment advice (even if it's from Buffet, himself), you must take ultimate responsibility for the decisions you make regarding your money. It is highly probable that at least some of your financial choices will not be profitable ones. However, by taking responsibility for your decisions, you can learn from your mistakes and make more lucrative choices in the future. Even Buffet admits to some glaring errors in his investment strategies, which he has been able to effectively overcome due to his willingness to live and learn.
Few know how to make a buck (or a billion) like Warren Buffet. With his sound advice under our own belts, maybe we can also make our bank accounts a little sweeter.
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