Warren Buffett has ten rules that will not only make you wealthy-IF YOU FOLLOW THEM- but a better person. I summarized the rules below and pasted a link to the entire article.
PULLED FROM INVESTORS BUSINESS DAILY JUNE 16, 2019 EDITION
“Buffett’s formula for success is simple: he doesn’t veer from his principles about life and work. That goes for the investing lessons he learned in 1949 after reading “The Intelligent Investor.” The book is a bible of value investing, written by his hero and eventual college professor Benjamin Graham.
“They are principles because they don’t change,” says Robert Miles, a Buffett expert and author of “The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers.”
WARREN BUFFETT’S NET-WORTH IS DRIVEN BY THESE IRONCLAD TEN REULES
- Find work that you love. Doing what you love to do, Buffett often says, will boost your chances of success at work. Buffett knew at an early age what brought him joy. And that’s what he’s focused on his entire life. “I was always playing around with numbers,” he noted in the documentary. Buffett is fond of saying that for over 60 years he’s been able to “tap dance to work.” Reading annual reports, scouring balance sheets, picking stocks and identifying businesses to buy makes him happy.
- Stick to your principles. Ignoring the herd mentality will keep you on track
- Buy stocks and hold them for the long term — if not forever. Invest in good, well-managed companies with recurring revenue streams. And, of course, buy when everyone is fearful and stocks are on sale.
- Stay calm under pressure. Buffett’s ability to stay calm and avoid making emotional decisions in crisis is a winning combination. It not only that applies to success in investing, but life in general.
- Don’t compromise your integrity. Buffett’s integrity has boosted his success.
- Never stop learning. It’s easy to quit learning once you graduate from college and get busy at work. But reading, learning and staying current on things pays dividends over time. Buffett often says he spends most of his work day reading (newspapers, books, annual reports, balance sheets) and thinking. He often equates gaining knowledge with the financial concept that made him rich. Inc. magazine asked Buffett how to get smarter. Buffett raised a stack of papers and said I “read 500 pages like this every day. That’s how knowledge builds up, like compound interest.”
- Polish your communication skills. Buffett is famous for his folksy, next-door neighbor way of communicating complex subjects in ways that everyone can understand. He says his communication skills — which are vital to success — weren’t always up to par. In his early 20s, after hitting a roadblock trying to convince older investors to invest with him, he took a public speaking course from self-help guru Dale Carnegie. “I had to be able to communicate with people better, and especially groups,”
- Surround yourself with the right people. If you want to better yourself, surround yourself with people that are better than you, Buffett says. The billionaire’s list of friends reads like a who’s-who of American business: Microsoft (MSFT) founder Bill Gates; the late-Washington Post publisher Katharine Graham; and his longtime business partner and Berkshire co-chairman Charlie Munger. Buffett’s simple message: make sure you hang out with the right people and don’t fall in with the wrong crowd.
- Stay focused, drown out the noise. If you want to excel, laser focus on what you’re doing, Buffett says. “I’ve never known anyone as focused as he is,” his daughter Suzie Buffett said in “Becoming Warren Buffett.” Buffett mostly keeps to himself, reads most of the day and doesn’t overbook his schedule. Buffett builds his routine to free himself up for the most important work. Kass recalls Buffett demonstrating how important his time was to him the first time he met his students. “He took out a pocket calendar and there was nothing there. It was empty.” Bill Gates’ dad once asked his son and Buffett to write down one word to describe their success. Both wrote the same word: “focus.”
- Don’t overspend. Warren Buffett lived in the same house for his entire life. He bought it in 1958 for $31,500. He keeps other spending impulses in check, too. If you want to accumulate wealth, it’s better to save and invest than spend lavishly. In a penny-pinching scene in “Discovering Warren Buffett,” the legendary investor opts for a less expensive Egg McMuffin at a McDonald’s (MCD) drive-thru, explaining that “the market’s down this morning so I think I’ll pass on the $3.17 and go with the $2.95.” The more expensive version, he says, is served on a biscuit, not an English muffin.
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I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger, with a NC State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I started my first business at ~13 years of age. I am a successful investor in equities and real estate and happy to share my personal finance and investment lessons learned with you. However, I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog, as recommendations for your personal situation. For individual finance advice please seek your own licensed CPA or financial advisors.