Although he has never topped the lists of the world’s richest men, he is the most well-known and respected investor thanks to his buzzwords that go viral as quotes online, on social media, and even in the daily chatter of the investor community.
Therefore, if you dream of climbing the money mountain, it is wise to follow in the footsteps of those who came before you rather than trying to reinvent the wheel. In this article, we will give you some of the wisest words of Warren Buffett and a brief explanation of them.
The great perk of Warn Buffett’s tips is that they are surprisingly applicable to all areas and businesses; whether you want to work as an engineer or if you want to master online casino games, these advice pieces will give you a strong knowledge of how to manage money and get the most out of it.
Never lose your money!
One of Buffett’s top tips that helped create his folksy charm:
Rule #1: Never lose money
Don’t forget Rule #1
Without a word of exaggeration, all losses are bad and unnecessary, even the slimmest, do not try to be convinced that a close loss is better than a distant gain; Simply, this is prattle! There is no good loss in any way, and therefore you must avoid losing in any way.
The perfect way to avoid losses from the start is to learn how to invest smartly. For example, if you want to master the game of blackjack, it is important to understand the explanation of blackjack terms first, then you can start playing, after you gain the necessary skills and experience, you can start betting with real money to get money winnings.
Likewise, suppose you want to launch your own business. In that case, you have to study the market, learn about your competitors, and identify your target customer’s preferences, then you can start your start-up.
Always get high value at a low price
“Price is what you pay; value is what you get” Although Buffett’s statement seems overwhelmingly intuitive, it is deeply profound and can change the way you spend your money. For example, if you see a $1,000 product with a 25% discount, you didn’t save $250, but you have spent $750. The question here is: Does this product give you the value of $750 or not?!
A loss occurs when you pay a price that does not match the value you got. What are the practical applications of this saying? Consumer debt is the most prominent example of obtaining a low value for a very high price.
When you get a loan from the bank to buy a car, you are required to pay interest, make periodic maintenance, pay the value of insurance, that is, the loan will add huge burdens to your budget without offering you a real benefit.
Furthermore, you may consider selling the car before you pay off the total amount of the loan, while the worst thing is missing one or more installments, in which case you owe more interest to the loan’s provider. This rule also applies to credit card debt or purchasing stuff you don’t need.
Instead, you can apply the rule of “value for price” in any product or service you’re considering buying. “Whether you want to buy socks or stocks, you need to find the high-quality with low-prices,” says Buffett.
Adopt healthy financial habits
“Most of our behavior as humans is a habit,” Buffett said. “Psychologists say a habit begins as threads that are too light to be felt until they become too heavy to break like chains.”
Therefore, it is very beneficial to build positive financial habits, especially from an early age, and break down other habits that hurt your financial position. In other words, if you tend to save money instead of buying things you don’t need, it will benefit you in the long run.
Also, if you tend to buy durable goods than single-use products, you will save a huge amount of money in the long run.
Avoid debt as much as possible
Buffett built his fortune by taking profits, not paying interest! In a 1991 speech at the University Of Notre Dame, he said, “I have seen people go bankrupt because of loans … In this world, you don’t need to borrow for any reason, if you are a savvy investor you will make a lot of profits without having to borrow.”
Buffett particularly cautions against credit cards because they make borrowing available 24/7 without a hitch. Buffett once said, “Banks take very high-interest rates on credit cards, ranging from 18% to 20%. If I borrow at rates of 18% and 20%, I will go bankrupt!”
Always keep away a sufficient amount of cash
Although cash is an opportunity for everyone to purchase real estate, cars, and spend on travel and luxury, it is important to keep enough cash reserves on hand to use when needed. “My company always holds at least $20 billion in cash for an emergency,” Buffett said in 2014.
Can you leave your home without cash? Can you pay for goods and services without cash? For both individuals and businesses, money is the oxygen, and without it, everything is threatened with collapse or at least heavy losses.
Invest in yourself
“Anything you invest in yourself will pay you tenfold back,” Buffett said. In fact, you are your greatest asset and anything you do to improve your talents and make yourself better will pay off in the long run. Unlike other investments, no one can tax your abilities or skills and they cannot be stolen.
Even if you are not thinking of starting your own business one day, investing in yourself will help you to get a better job with a higher salary, and thus you will achieve financial security for yourself and your family.
At the present time, the level of competitiveness is very high in the business community as every employee seeks to gain as many skills as possible to get better job opportunities.
Learn more every day about money
“The risk comes from not knowing what you’re doing,” Buffett once said. Some investors spread their money on fields they know nothing about and suffer from heavy casualties. This tip complements Buffett’s previous series of tips aimed at reducing risks and increasing financial security.
Yet risk is always close to all types of investing, but the deep knowledge can control it, and as Charlie Munger, Buffett’s partner, says, “Try to go to bed smarter than you were when you woke up.”
About the Author
Daniel Klink, the Director of Marketing and Content at Arab Casino HEX portal. His number one passion is giving readers accurate information on the iGaming industry, providing comprehensive reviews of trusted gaming sites, and getting more curious people into the growing iGaming community, relying on three core values which are objectivity, integrity, and impartiality.
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