Warren Buffett – Wisdom from the Oracle of Omaha

Warren Buffett - Wisdom of the Oracle of Omaha

Warren Buffett - Wisdom of the Oracle of Omaha

Business (MP) Warren Buffett (middle name Edward) is considered the most successful investor of the 20th century. I’m not talking single company investment like Jobs and Gates. I’m talking about multiple business investments. Mr. Buffett got there because his true genius is being able to simplify complex business decisions into sound investments that stood the test of time. As of July 2015, according to Forbes, Mr. Buffett possesses an estimated net worth of $63 billion dollars.

Warren Buffett is often called the “Wizard of Omaha” or “Oracle of Omaha”, and is noted for his adherence to value investing and for his personal frugality despite his immense wealth. He started out as an investment salesman, and stockbroker. Today, Buffett is Chairman of Berkshire Hathaway, a $400 billion dollar company. The company owns and operates an insurance arm, including GEICO, a utilities and energy group, multiple clothing manufacturers, including Fruit of the Loom, building products manufacturers, financial groups, and multiple retail stores. It also employs 260,000 people. He still lives in the same house he brought for his family in 1958. Now, let’s have a peek at some wisdom Mr. Buffett has dispensed over the years…

Warren Buffett’s Top Advice

1. Choose the Five Most Important Things

“First create a list of the top 25 accomplishments that you would like to complete over the next few years, and to then pick the five most-important list items. Warren Buffett stated that people need to “avoid at all cost” the initial, longer list, as it would hinder the achievement of the top-five.” But Buffett doesn’t top there…

2. Don’t Pretend to Be an Expert

“If you don’t invest in things you know, you’re just gambling,” Buffett told CNBC. “You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick ‘no,’” he wrote to shareholders in 2014.

3. Focus Your Estate in Index Funds

In his 2014 letter to Berkshire Hathaway shareholders, Buffett revealed his estate plan, reminding readers to keep their investments safe, low-cost and long-term.

“My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.”

4. Save Money – Don’t Try to Get Rich Quick

“Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It’s pretty easy to get well-to-do slowly. But it’s not easy to get rich quick.”

5. If Stock Prices Drop, Buy — Don’t Sell

“I like buying it as it goes down, and the more it goes down, the more I like to buy. … If you told me that the market was going to go down 500 points next week, I would have bought those same businesses and growth stocks yesterday. I don’t know how to tell what the market’s going to do. I do know how to pick out reasonable businesses to own over a long period of time.”

Warren Buffet’s Life Advice

6. On Earning

“Never rely on a single income. Make Investments to create a second source.”

7. On Spending

“If you buy things you do not need, soon you will have to sell things you need.”

8. On Savings

“Do not save what is left after spending, spend what is left after saving.”

9. On Taking Risks

“Never test the depths of the river with both of your feet.”

10. On Expectations

“Honesty is an extremely expensive gift. Don’t expect it from cheap people.”

Don Briscoe
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Don Briscoe

Finance educator, advisor, and leading voice in the global financial literacy movement.Founder and editor of MoneyPacers.com.He lives and enjoys life with his family in New York.
Don Briscoe
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