According to Forbes’ 2016 list,
Warren Buffett has the distinction of being the third richest
person in the entire world. Just let that sink in a bit. His personal
net worth is an estimated $60.8 billion, and his company Berkshire Hathaway is valued at over $250 billion.
Here are 10 pieces of advice Buffett has for people who are looking to build their own wealth through investments.
- Read as much as you can on investing. Buffett’s favorite book is a classic from 1949 called “The Intelligent Investor”, by Benjamin Graham, and he also recommends books by author John Bogle.
- But then, you have to actually get your feet wet. “The earlier you start, the better.”
- “Cash is a bad investment over time. But you always want to have enough so that nobody else can determine your future.”
- Credit cards are not a good way to build wealth – the interest rates are simply too high.
- You should constantly be investing in yourself and working to improve yourself: “A person’s main asset is themselves, so preserve and enhance yourself.”
- Go for the long-haul. Warren Buffett has famously said, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes!”
- Try an index instead of trading stocks individually. “This accomplishes diversification and time, two very important things.” A good example is the S&P 500.
- If you have your heart set on stock trading, make sure you only deal with industries you understand.
- Learn from other people’s mistakes. What’s Warren Buffett’s biggest mistake? “The biggest one… is being reluctant to pay up a little for a business that I knew was really outstanding.”
- His last piece of advice? Trust yourself, don’t follow the herd. “To be a successful investor, you must divorce yourself from the fears and greed of the people around you.”
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