Warren Buffett's 5 Rules For Investing
This is a professional note extracted from an online article.
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Save what inspires you
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If you work from a loss, it's much harder to get back to where you started, not to mention ea...
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.
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Investing is about laying out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.
Most of the time, this is best achieved th...
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Each of us, through experience or study, has built up useful knowledge on certain areas of the world. Some areas are understood by most of us, while some areas require a lot more specialty to evalu...
“If something is important enough, even if the odds are stacked against you, you should still do it.”
Elon Musk (Founder Of Spacex, Tesla Motors And Contributor To Paypal): Musk, at 12 years old, taught himself to code and sold a game he made for $500. When he moved to Canada, he worked odd jobs including tending vegetables, shoveling out grain bins, and cleaning out gunk from a boiler room in a lumber mill.
In university, Elon sold computer parts to make extra cash and turned his 10 bedroom fraternity home into a nightclub on the weekends and charged a cover. Since then, he’s built several companies, including SpaceX, Tesla Motors, PayPal, and zip2.
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...is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.
It’s a statement wherein you can jot down your assets and liabilities.
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“A person can be highly educated, professionally successful, and financially illiterate.”
A financially literate person should be able to answer these questions:
Banks don’t like to give away their money. That mindset is reflected in the interest rates of checking and savings accounts of 0,5% and 0.9% avg. annual interest respectively.
When you deposit your money in the bank, the bank turns around and invests that money at 7% a year or more. After they collect their profit, they give a tiny shaving of it to you.
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Elon Musk uses decision trees to make big decisions (a tool that uses a tree-like graph or model of decisions and their possible consequences, outcomes, and resources). They are particularly useful for avoiding stupid risks and big bets that aren’t likely to succeed.
Most became a billionaire by making unlikely big bets, as their expected return statistically was much higher than safer bets.
One of the best ways to get information is not from just being better at searching Google, it’s from learning how to build a network and get the information you need through that network.
This network should include people’s lessons learned and hacks, topics that are too sensitive to talk about because they make someone look bad, and tacit knowledge (knowledge that people have but aren’t able to articulate).
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