Monday, September 26

Warren Buffett reveals his decalogue to become a millionaire

Be patient. This is a Warren Buffett rule of thumb. For this guru, “if someone is sitting in the shade today, it is because someone else planted a tree a long time ago.” That is why the billionaire calls to invest thinking in “a horizon of several decades and flee from quick profits.” “Some things take time. You can’t produce a baby a month by getting 9 women pregnant.”

2. Never invest in a business you don’t understand

A classic that is often related to the term FOMO (Fear of Missing Out, that is, fear of missing it). This fear of missing the train causes the investor to enter the markets at the wrong time because he sees the price rise and rise and, then, he begins to chase it. In this sense, Buffet proclaims that every investor has to learn to manage money and have some knowledge about the chosen asset. That is why much of its work focuses on limiting exposure and minimizing risks.

3. Avoid getting into debt

Loans can be taken as an addictive tool that ends up causing problems in the future. “I’ve seen so many people fail because of alcohol and borrow money. You don’t really need to borrow that much. If you’re smart, you’re going to make a lot of money without borrowing.”

4. Invest in yourself

“Whatever you do to improve your talent and become more valuable, you get it back tenfold. Knowledge cannot be taxed, nor can it be stolen. It is safe in every brain.”

5. Take care of your lifestyle

It is quite common that the more money you have, the lifestyle increases exponentially. This is something that Buffett has rarely carried out, since despite amassing a great fortune, he has always been characterized by leading an austere life. For example, you live in the same house you bought in 1958, you spend no more than $ 3.17 on your breakfast, or you buy discounted cars.

6. Use cash

“Don’t leave home without cash,” confesses a Buffett who uses this method, he says, 98% of the time. Using a credit card can lead to spending money that you don’t have, he warns.

7. Buy something expensive at a low price

In a letter to Berkshire Hathaway shareholders, Buffett advised them that money is lost by paying a price that does not match the value of something, so he told them that “the price is what you pay and the value is what you get. what do you get”. “Whether it’s socks or stocks, I like to buy quality merchandise when it’s on sale,” he revealed.

8. Surround yourself with people who contribute

For Buffett, one of the keys that he often reiterates is to surround himself well. Of all that list of contacts, in which friends and co-workers stand out, the billionaire highlights the importance of marrying someone who inspires and infects good energy. “You must associate with people who are the type of person that you would like to be, because you will move in that direction.”

9. Know how to invest in times of inflation

During a shareholders’ meeting, Buffett was asked which holdings in his company were best suited to prosper during a period of high inflation. His response was that the best business to own is one that “does not require continuous reinvestment because it becomes more and more expensive as the value of a dollar falls.” The best businesses during inflation are those that are bought once and then do not have to continue making capital investments later, “he confessed.

10. Stay the course

The desire to obtain early results can seriously affect the financial stability of investors. All made worse by the supreme volatility of most markets. In that sense, Buffett’s recommendation is to remain calm at all times. “Although markets are generally rational, they occasionally do crazy things.”