When it comes to investments, we all want to have the success that has made Warren Buffett with your money. This man is already about 80 years old and is still chief executive (CEO) of Berkshire Hathaway, Omaha-based company, which operates a large and diversified line of businesses including insurance, manufacturing, energy and services, as a major stake in Coca-Cola, American Express, IBM, Procter & Gamble, the bank Wells Fargo and Goldman Sachs, among others.
Warren movements are followed closely by the market today is a great influence. When it becomes public what is investing, the prices of these shares soar, heritage and suggests, currently estimated at 59 billion dollars and in 2012 the total compensation received was $ 423,923, although his base salary has It was just USD $ 100,000 for 20 years.
Warren Buffett, an economist by profession, went from selling newspaper in the street when he was young to head the list of men with greater personal wealth in the world. Its special personality has been admired. In recent years, he announced the decision to donate his entire fortune to the foundation of another who also occupied the Forbes, Bill Gates, speaking of Buffett list and trajectory requires a whole book, but look at some lessons we can take in relation to money management:
- Spend with Wisdom: Philosophy of life Buffett stresses frugality in their personal finances, just remember that still lives in Omaha house he acquired in 1958. Remember that no matter the level of income you have, if you fail to control expenses, you can lose your quality of life very quickly.
- Do not invest in anything you do not understand: No matter what industry or type of investment where you have the opportunity to put their money, it is important to understand how it works and what the risks they are incurring are; it is to get involved in this research task requires. Recall that Buffett was one of the few on Wall Street who did not invest in companies known as the “dot com” to the late 90’s, before the technology bubble burst in which many lost much of its heritage.
- Learn to take risks and how to manage them: Risk is inherent in investments, understand what you’re investing helps mitigate the risk, but you know what your tolerance for losses, Buffett warns that if you can not see fall 50% of your investment without panic, you should invest in market securities. It also tells us that the more absurd is the behavior of the market, the better the opportunity for the disciplined investor and to be fearful when others are greedy and greedy when others are fearful. This brings us to 2008, during the financial crisis. Weeks after the bankruptcy of Lehman Brothers, Warren Buffett invested five billion dollars in Goldman Sachs, when everyone thought the world was going to end.
- Buy quality and never bandages: Buffett always indicates that investing in the stock market must think as an owner, you must feel that you are really buying the company and not just a paper based on a simple analysis of financial ratios. Companies with extensive experience, brands and loyal customers are the main features you are looking Buffett in actions added to its portfolio. That is why the time is also part of your investment. You must devote the necessary time to review and convince you that the investment you are doing is really an opportunity.
- Learn to say “No” and think long term: When you take risks, you must implement the gift of patience. You should not always be buying and selling assets, less their match strategy headlines of the day. It is very common to find people who are influenced easily by trends or results from other investors. Buffett said the market always gives you opportunities, it’s just a matter of being prevented at bat.