Never Lose Money

• Rule No 1: Never lose money.
• Rule No 2: Never forget rule No. 1.

If you work from a loss, it's much harder to get back to where you started, not to mention earn gains.

• Price = what you pay.
• Value = what you get.

You lose money when the price you pay does not match the value you're getting. For example, when you're paying high interest on credit card debt or spending on stuff you hardly use.

You gain money when you look for opportunities to get more value at a lower price: For example, buying quality merchandise when it is marked down.

Most of your behavior is habitual. You can change your habits and the earlier you start, the better.

Saving is a habit. Learn the habits of saving properly early. Pay attention to your money habits. Strengthen those habits that help your finances, and break the habits that hurt your finances.

Warren Buffet built his wealth by getting interests to work for him.

• Many people fail because of liquor and borrowed money. You can make a lot of money without borrowing.
• Avoid credit cards, because the interest rates are very high on them. “Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, I’d be broke.”

To ensure security, always keep cash or cash equivalent reserves available.

Businesses and individuals may desire to put liquid cash to work through investments. When bills are due, only cash is legal tender. Be sure to have it on hand.

You are your own biggest asset. Invest as much of yourself as you can. Improve your own talents and make yourself more valuable. Nobody can tax or steal it.

Part of investing in yourself should be learning about managing money. Risk comes from not knowing what you're doing. Educate yourself about personal finance. Read a lot. Make sure you get to bed smarter. 

For the average investor, Warren Buffet advocates for index funds. 

• Put 10 % of the cash in short-term government bonds.
• Put 90 % in a very low-cost S&P 500 index fund.

Warren Buffet said that if you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99 %.

You can enrich your life and others' by giving back.

Invest with the future in mind. A tree planted today will give shade in the future.  Nurturing seed of financial success now will lead to shade later on, for example, freedom from debts, a secure retirement or college fees for your children.