MoneyMagpie

Apr 27

10 top pieces of advice from the second-richest man in the world

I’m a big fan of Warren Buffett and not just because, as the 2nd richest man in the world, he’s worth $73.1 billion…yes billion!

He’s a brilliant thinker and a seriously witty guy.

 

Warren Buffett is probably the greatest investor of all time.

He’s certainly the greatest living investor.

We promote many of the principles he espouses, including:

 

pay off your mortgage

Woman shaking hands with banker

When Warren Buffett was asked what his advice was for ordinary people to make money and create a secure future for themselves he said that the first thing they should aim for is to pay off their mortgage.

We have a lot of help for you to pay off your mortgage in double-quick time as in this article.

The great thing about overpaying on your mortgage is that a) you save thousands in interest payments over time and b) you get mortgage free much quicker which means that you don’t have to work so hard each month to bring the money in. It’s a secure investment because once you’e paid off your mortgage…you’ve paid it off…that’s it.

 

set up a savings safety net

Financial safety net

All the experienced investors say this and Warren Buffett has said it several times.

As you can see in this article on the importance of having a savings safety net, you need to set aside enough money to cover your living expenses (just go for a survival budget) for at least six months before you get into proper investing.

That means that if you suddenly need to access some cash because you lose your job or get divorced or are bereaved, you can do it without having to cash in some investments at just the wrong time.

 

invest in cheap, easy index-tracking funds

Index-tracking funds on mobile phone

Warren Buffett is a big fan of cheap, easy, index-tracking funds as a good investment vehicle for ordinary people like us.

We are too. In fact, you can see in this article why we like index-tracking funds.

Here you can see how investing in index-tracking funds in your ISA will make you a lot more money than putting it in cash ISAs

 

Warren Buffett Quotes

Warren Buffet Quote

Warren Buffett and his business partner Charlie Munger are highly intelligent, deep-thinking and also very witty men. Pretty much anything they say or write is worth reading or listening to.

I’ve just seen an article on Entrepreneur.com about some of Buffett’s best sayings (there are lots of them in his annual reports for his company Berkshire Hathaway). Take a look and you will see what I mean. He’s not called ‘the sage of Omaha’ for nothing!

 

1. Stop and think

“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.”

 

2. Remember your business basics

“Price is what you pay. Value is what you get.”

 

3. Think, think, think

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

 

4. Be smart, be realistic

“I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”

 

5. Don’t talk the talk until you can walk the walk

“After all, you only find out who is swimming naked when the tide goes out.” (my favourite of Buffett’s lines!)

 

6. Morals maketh the man

“You can’t make a good deal with a bad person.”

 

7. Be good – seriously

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

 

8. Know what is genuinely valuable

“Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”

 

9. Know when to fold ’em

“The most important thing to do if you find yourself in a hole is to stop digging.”

 

10. Go for it!

“I always knew I was going to be rich. I don’t think I ever doubted it for a minute. ”

Warren Buffett meeting with Barack Obama

President Barack Obama meets with Warren Buffet in the Oval Office, July 14, 2010. (Official White House Photo by Pete Souza)

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WHAT DO YOU THINK?

3 thoughts on 10 top pieces of advice from the second-richest man in the world

  1. Luck? Luck = when hardwork meets opportunity. If you do become a billionare on your journey then so be it.. why not? Nothing wrong with that, imagine being able to share the success or even start to mentoring others on a similar journey. Becoming a millionare or billionare is a secondary transtion which occurs when you enjoy what you do and there is a compelling need/demand for the solution/product or service you are offering.




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  2. To be successful you need: a bit of luck, some education or wish to learn,and a brain that works out of the box. I am not rich but i have spend years learning and sacrificing to get exactly what i have planned for…yet people say; “how lucky you are !!! ” they dare not do what i do !.
    Have a good plan and a burning desire to succeed, one does not need to be a billionaire,to live well…do not be greedy.




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