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Warren
Buffett's Ten Money-Making Secrets
Reinvest your profits.
“Even a small sum can turn into great wealth,” Schroeder writes, if you’re
disciplined to not touch your profits. Let the power of compound interest work
for you.
Be willing to be different.
Don’t follow the herd. Do what is best for you and your situation.
Never suck your thumb.
Ah, how I could learn from this one. Buffett makes decisions quickly based on
the available information. I tend to sit and stew about things. Acting
decisively can give you an advantage and prevent procrastination.
Spell out the deal before you start.
I stress this all the time: Don’t sign a contract unless you’ve read it
(especially not a mortgage). Read the fine print. Understand the what you’re
getting yourself into.
Watch small expenses.
While it’s true that the big things matter, the little things do too. Frugality
is an important part of personal finance. But this principle also applies when
investing, which is one reason I’m a fan of low-cost index funds.
Limit what you borrow.
“Living on credit cards and loans won’t make you rich,” writes Schroeder. Sure,
leverage can get you into a home or a new car, but too much debt is one of the
biggest drags on your financial well-being.
Be persistent.
If you know what you’re doing is important and right, stick to it. Doggedly
pursue your goals. Learn to “fail forward”.
Know when to quit.
The other day, I wrote about the danger of the sunk-cost fallacy. Just because
you’ve already paid $10 to see Indiana Jones and the Kingdom of the Crystal
Skull, doesn’t mean you should sit through to the end. Be willing to cut your
losses and walk away.
Assess the risks.
“Asking yourself ‘and then what?’ can help you see all of the possible
consequences when you’re struggling to make a decision — and can guide you to
the smartest choice.”
Know what success really means.
Success is different for each of us. Find what it is that brings meaning to your
life, what makes each day important. Make this your focus. Buffett says: “When
you get to my age, you’ll measure your success in life by how many of the people
you want to have love you actually do love you. That’s the ultimate test of how
you’ve lived your life.”
Reprinted from Parade Magazine
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