Warren Buffett, who has an estimated fortune of $62 billion, is the richest man in the entire universe, and here are ten effective lessons to learn from the respected businessman.
1. Invest wisely
Buffett prefers to invest in ideas and not the people behind them.
He once said that he chooses companies that are so marvelous, even an idiot could run them, mentioning that someday one will.
2. Reinvest Your Profits
When you initially start making money in the stock market, you may be inclined to consume it. Instead, reinvest the profits.
Mr. Buffett learned this early on. In school, he and his friend purchased a pinball machine to put in the hair salon. With the money they earned, they purchased more machines until they had eight to put in different stores.
When the friends sold the enterprise, Warren Buffett used the earnings to buy and start another small business. By age 26, he’d managed to gather $174,000 — or $1.4 million in today’s money.
Even a tiny amount can turn into great wealth.
3. Live below your means
Even though a net worth of $39 billion, Warren Buffett lives in an outstandingly unpretentious home.
He purchased the Omaha, Nebraska, house for $31,500 in 1958 and today he calls it the best investment he ever made.
Instead of spending every amount he makes, Warren Buffett has preferred to live prudently and reap the benefits.
4. Spell Out The Deal Before You Start
Your bargaining chip is always great before you begin work. Buffett got to learn this lesson the hard way as a kid when his grandfather Ernest employed him and a friend to dig out the family grocery store after a blizzard.
They nearly spent five hours shoveling until they could hardly straighten their cold hands. Later his grandfather gave them less than 90 cents to split.
Warren Buffet understood one thing always fix deal in advance — even with your kith and kin.
5. Resist fads
You will not find Warren Buffett investing in popular or contemporary stocks like social media sites and technology, Sites like Facebook may be in trend today; he feels that there’s no way to know that the stocks be just as hot selling five years down the line.
6. Restrict What You Borrow
Surviving on loans and credit cards will never make you rich. Buffett has never borrowed a notable amount, either for investment or for the mortgage.
He used to get many disturbing letters from people who thought their loan was mandible but became overpowered by debt. His advice: Find a way with creditors to pay what you can.
7. Never give up
When Warren Buffett acquired Berkshire Hathaway, it was a loss-making Textile Company, engaged inlining for men’s suits.
Warren Buffett saw potential, nevertheless, observing price framework linked to the mill closings. With his acumen and leadership, the company was able to grow to multinational conjunction.
8. Realize When To Quit
When Warren Buffett was a teen, he went to the racecourse. He bet on a race and lost. To recover this loss, he went on to bet on another race.
He lost again, leaving him with close to nothing. He was scared — he had wasted nearly a week’s income.
The mistake was never repeated by him, realize when to walk away from a loss, and don’t let agitation fool you into attempt again.
9. CEOs and Persona
Warren Buffett prefers to buy companies run by managers who believe in ethics and has always been his key policy of investing.
In the year 2014 letter, he explains what he looks at in CEOs, which has been a great lesson for companies searching for their own CEOs….. Rational, a calm and decisive individual who has a great understanding of business and has great insights into human behavior.
The character is crucial: A Berkshire CEO must be “all in” for the company, not for himself. He can’t help but earn money far more than any possible need for it.
For him, it’s important that ego will motivate him to reach for pay matching his peers, even if his achievements far exceed theirs.
The behavior of a CEO has a huge impact on managers down the line: If it’s clear to them that shareholders’ interests are paramount to him, they will, with few exceptions, also embrace that way of thinking.
10. Know What Success Really Means
Despite all his wealth, Warren Buffett does not measure his success only by dollars. In 2006, he pledged to give away almost his entire fortune to charities, to the highly respected Bill and Melinda Gates Foundation.
He does not fund monuments to himself — no Warren Buffett buildings or halls. But the truth is that nobody in the world loves them, and when you get to my age, you’ll measure your success in life by how many of the people you want to have loved you, actually do love you.
And that is the ultimate test of how you have lived your life and that too at the fullest.