7 pieces of investment advice from Warren Buffett
Thomson Reuters
Imagine if you could sit and have a cup of coffee with one of the world’s richest men.
What if that rich man built his wealth the same way you are building yours – through investing?
What if that man were Warren Buffett?
What would you ask? Would you try to learn something that would completely change your entire world of financial success?
Perhaps you feel like that would never happen. How could I ever sit and learn from Warren Buffett?
The truth is that you can!
No, maybe not in the traditional sense of an actual face-to-face coffee brunch. But you could get some insight from what he has to offer by looking at the things he’s already said to other people.
In fact, there are 7 insights he’s already shared from which we can glean a lot of understanding about wise investing.
Let’s explore each of them together.
"Risk comes from not knowing what you're doing."
People talk about how risky the stock market is. “It’s just too easy to lose money,” they say. Sure, it’s got risks involved. But so does depending on one employer who could go bankrupt or let you go at any time. So how do you manage risks in the stock market? Buffett suggests to know what you’re doing. Learn. The more you understand it, the better you will be at it.
"Someone's sitting in the shade today because someone planted a tree a long time ago."
The best time to invest is several years ago. The second-best time is now. The sooner you get in the better. Don’t wait to buy stocks. Buy stocks and wait.
"Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."
Here, Buffett is talking about the sunk-cost fallacy. This is the idea that you’ve already put money into something, so you should keep striving to make money with the initial investment even if doing so is both risky and requires more time and money. If you got into a bad deal, it’s better to count your loss and move on than to try to force your way into making something from nothing by dropping more resources into a lost cause.
See the rest of the story at Business Insider
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