Buffet 10 Rules
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Transcript of Buffet 10 Rules
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8/2/2019 Buffet 10 Rules
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WarrenBuffet's10RulestoSuccessThursday/October/2310:10Filedin:SuccessbyDerekRowley,(c)2008,AllRightsReserved
WarrenBuffetwasrecentlyinterviewedinParademagazine,theSundayinsertinGannetnewspapers.Paradecanbeagoodsourceforalotoflightreading,sudukopuzzles,andcelebritywatchfluffpieces.IdidnotexpecttoreadaboutAmericasmostrespectedinvestorgivingsoundbusinessadvice.MuchofwhatBuffetrecommendsfallsintothecategoryofcommonsense.But,perhapsitisabitrefreshingthatsuccessandwealthcanbeattributedtofollowingcommon-senseprinciples.
HereareBuffets10rules:
1.ReinvestYourProfits.Thismakessensenotonlyinthestockmarket,butinasmallbusinessaswell.Entrepreneurswhobleedalltheprofitsoutofabusinessfindthattheymaystruggletogrowthebusinessintosomethinglargerandmorevaluable.
2.BeWillingtobeDifferent.Buffetdidntmakehisfortunebyfollowingthecrowd.Instead,heinvestedwheneveryoneelsewaspanicked,andsoldoffwheneveryoneelsewasbuying.Thatstrategyalwaysbeatsthemarket.Doingwhateverybodyelseisdoing-thesamewaytheyaredoingit-istherecipeforbecomingaverage.Nobodypaysextraforaverage.
3.NeverSuckYourThumb.Afteryougathertheinformationyouneed,makeadecision.ToBuffet,anytimewastedtogettoadecisionisjustthumbsucking.Successcomesfromimmediatelygrabbingeveryopportunitythatyoucanrecognize.
4.SpellouttheDealInAdvance.Yourbargainingpositionisneverstrongerthanbeforeyouarecommitted.So,advantageofthatopportunitytospelloutthedetailsandspecificsofanydealbeforeyoustart.Thisisespeciallytruewhenworkingwithfriendsorfamily.
5.WatchSmallExpenses.Intheinvestmentworld,thistranslatesintowatchingnotjustthereturnsofferedbyinvestmentfunds,butalsothefeeschargedbythefundmanagers.Thisissotrueineveryaspectofsmallbusinessandpersonal
finance,aswell.
6.LimitWhatYouBorrow.Buffetclaimstoneverhaveborrowedasignificantamountofmoney.Hisadviceistoremaindebt-free,andthensaveandinvestmoney.Thisisaverycounter-cultural(see#2)contrasttothosewhopreachgettingrichusingOtherPeoplesMoney.
7.BePersistent.Thisisanadvantagethatthesmallentrepreneurhasoverlarger,moreestablishedcompetitors.Persistenceandingenuitycan,andoftendoeswinagainstlargeodds.Ifyouvedoneyourresearch,takencareofthedetails,watchedyourexpensesandstayedoutofdebt,yoursuccessthroughpersistencemayonlybeamatteroftime.
8.KnowWhentoQuit.Dontthrowgoodmoneyafterbad.Resistthetemptationtosalvageabaddealwithalast-minutehomerun.
9.AssesstheRisk.Buffetrecommendsthinkingthroughboththebest-caseandtheworst-casescenarios.Thishelpsclarifytherisksandrewardsforanyventure,whichiscriticaltothedecisionmakingprocess.
10.KnowWhatSuccessMeans.Buffetdoesntmeasuresuccessintermsofdollars.Ashesays,Whenyougettomyage,youllmeasureyoursuccessinlifebyhowmanyofthepeopleyouwanttohaveloveyouactuallydoloveyou.Hereiswisdom.
