5 Things Investors Can Learn From Warren Buffett  

By | January 18, 2019

Warren Buffett needs no introduction. Here are 5 timeless advice from the master investor to help you steady your boat on your journey towards financial freedom.  

5 Things We Can Learn From Warren Buffett  

When it comes to investment decisions, trust Warren Buffett to give you the right advice. Having spent more than a quarter of a century sifting through financial statements, tracking balance sheets and analysing stocks, Buffet is in a league that far surpasses every other.   

But wait, do you know who this guy is?   

The Oracle of Omaha – rings a bell?   

Berkshire Hathaway– no?   

Well then, it’s time to catch up with the most celebrated investor the world has ever known.   

The Oracle Of Omaha

Born to a stockbroker in Omaha, Warren Buffett had a flair for business even at an early age. He filed his first tax return at the age of 14. When he was 15, he bought a 40-acre farm in Nebraska and used the profits to pay his way through college. He wanted to study at Harvard but when it didn’t work out, he settled for Columbia. At Columbia Business School, he met his mentor Benjamin Graham. The rendezvous with the famous economist and acclaimed author turned out to be a major turning point in Buffett’s career.   

Additional Reading: 5 Rookie Financial Mistakes You Must Avoid 

Berkshire Hathaway  

Berkshire Hathaway is one of the most valued companies in the world. To put things in perspective, a single stock of Berkshire Hathaway is priced at over US$ 2,97,500. In Indian currency, the value translates into a little over Rs 2 crores. Yes, you read that right.   

With a market cap of over $500 billion, Berkshire Hathaway has the reputation of being an infallible force in business leadership. However, when Buffett acquired this company along with Charles Munger, it was a failing textile business. He shifted Berkshire’s focus away from textile and began to use it as a holding company to invest in other companies. Today, among Berkshire’s wholly owned companies are GEICO, Duracell and Dairy Queen.    

Additional Reading: 7 Questions That Matter While Investing 

Warren Buffett is one of the richest persons in the world. His unique investment picks have earned him the nickname ‘The Oracle Of Omaha’. His investment technique has a massive fan following across the universe. Following are some of his timeless advice to investors in his own words:   

1. I’ve seen more people fail because of liquor and leverage—leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing. 

Borrowing is not bad as long as you are being sensible about it. If you must borrow, make sure you are doing it as an investment towards a future goal. Do your best to eliminate debt and you will be on your way towards financial freedom.   

 2. Don’t save what is left after spending; spend what is left after saving.” 

It’s never a good idea to save the amount you have left after paying your bills. Instead, put aside a fixed amount at the beginning of every month as your savings component. If you are struggling to find that sense of discipline, try going in for a Mutual Fund scheme that auto-debits the SIP amount for you.   

Additional Reading: Still Confused About SIP Investment? A Guide To Help You Sail Through 

3. “Chains of habit are too light to be felt until they are too heavy to be broken…you can have any habits, any patterns of behaviour that you wish. It’s a matter of what you decide.” 

Growing your wealth has a lot to do with the habits you follow. If you are frivolous and reckless, you are never going to make it. On the other hand, if you are cautious about your spending and keep a regular check on increasing your investment portfolio, you are already halfway there.   

4. “Be fearful when others are greedy and greedy only when others are fearful.” 

On your journey towards wealth, it’s very important to exercise caution, especially when you are investing. Do not blindly go by what people are saying. Read your own reports and draw your own conclusions. Keep your ears to the ground and watch out for everything that’s happening all around.   

5. “Invest in as much of yourself as you can. You are your own biggest asset by far.” 

This timeless advice holds true for investors and non-investors alike. Invest in yourself and you will never have to worry about anything else in the world. Buffett is an avid reader and even at the age of 88, he actively reads over 500 pages every day! If reading isn’t your thing yet, make it one right away.   

Once you start exploring ways of growing your wealth, you will be amazed at the sheer volume of choices at your disposal. Ready to begin? We are more than happy to help.   

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