Investing lessons from Warren Buffet

Most people try to invest and make money, but they often end up suffering losses because they make the same mistakes over and over again. Wishful investors should try to learn and emulate the minds of rich people like Bill Gates, Mark Zuckerberg, Michael Dell and Warren Buffett. Let’s focus on Warren Buffett, who has been described as the best investor on the planet. Here are some investment tips he sticks to:

1. Develop your investment mindset

Not all people are business oriented but we can improve our business minds by reading business related books. Warren Buffet invests much of his time studying business books.

2. Be patient with your investments

When Buffett buys a stock, he buys into the company. This means that he does not sell stocks at every boom or collapse in the market. He believes in the companies he invests in for the long term and holds the shares until he no longer believes or sees value in these companies. One of Buffett’s famous quotes, illustrating his penchant for long-term investments, “No matter how admirable the ability or endeavors, some things simply require large investments. You cannot create a baby in one month by carrying nine women.”

3. Prioritize value

Sometimes it’s not about how much we spend on something and the value we get from the purchase. Buffett believes that investors need to understand that markets are driven by supply and demand and that buying into a company with strong growth during market volatility is a great opportunity to gain value. Good stock buy at great price.

4. Check your emotions when investing

Human emotions affect the market more massively than any monetary model. Emotions can make people optimistic about something that hasn’t or rarely happened. Buffett recommended that controlling your emotions is more urgent than your IQ. According to him, “Achievement in investing is not related to intelligence. What you need is behavior to control incentives that cause harm to other individuals in investing.”

5. Invest in what you are familiar with and excited about

Buffett urges that you “never put resources into work that you don’t get.” Don’t put money into companies you don’t understand their business.

If you do not have enough information about the company, it will be very difficult to understand how the company will perform in the long run and to predict what the company will become in two years.

6. Live under your means

Despite his net worth of $87 billion, Buffett lives in a shockingly modest home. He bought his current home in Omaha, Nebraska for $31,500 in 1958, and today, he describes it as the third best investment he’s ever made. Instead of wasting money to live lavishly, Buffett lives frugally and reaps the benefits.

7. Save first and then spend the rest

People tend to pay the bills first, spend the rest, and save last. According to Buffett, this is the wrong approach. Buffet dictates that you should set aside a set amount of money each month as savings first, then pay your bills, and then spend what’s left after the bills are paid.

8. Remember your origin

When he was in middle school, Buffett found a job as a paperback handing over the Washington Post. He extended this early activity into a deep-rooted association with the Daily 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 significant investments.