Warren Buffett’s style of investing is certainly not the be-all and end-all of investment philosophies, and indeed some of his ideas about investing have come under scrutiny by Wall Street traders and financial pundits. He’s lucky, they say. He has good PR, they say. But there’s no denying that Buffett, a lifetime investor and one-time richest person in the world has an investment record unrivalled by any of his critics.
For that reason alone, a look at Warren Buffett’s investment style is beneficial. It’s also important to note that it is rare to achieve the level of investment success that Warren Buffet has over the course of his career. It’s for this reason he’s known as the “Oracle of Omaha”. Most of us do not have the knowhow to navigate the market like Mr. Buffet and would be better served by working with a private wealth management firm.
Even if you don’t expect to become the next Warren Buffet, there are lessons we can all take from his success.
He Started Early
At the age of eleven, Buffett made his first investment. It sounds like the stuff of tall tales, but it’s true. While you might not be able to start that early (unless you’re an eleven-year-old reading this) the important piece of advice to take away here is: start now. There is no sense in waiting for a market crash or waiting on a trendy stock; the longer you give yourself to invest and grow your wealth, the less risk you will need to take.
He Is Patient
Maybe you’ve heard the maxim “Time, not timing” thrown around by investors – those are exactly the words Buffett lives by. What that essentially means is that, rather than chasing the ups and downs of a volatile market, trying to act as an oracle for the “next big stock”, it is better to make wise investments and stick with them. Over time, he lets the compound returns roll in and…
Your money can make you money. This is a piece of advice the average investor should take note of. Rather than spend your annual investment income as you would regular income, reinvest that money and watch it grow over time. That’s the power of compound interest. For more info on reinvestment, get in touch with a wealth management company, who can guide you according to your age and financial goals.
He Is Frugal
Less an investment philosophy than a way of life, Buffett’s frugality is nevertheless a useful reminder that no matter how wealthy you are, you shouldn’t waste money. Any time you save money you create an opportunity for more investment and a more robust retirement savings.
While you probably won’t follow every little piece of advice Warren Buffett has to offer his investment philosophy carries with it wisdom learned through experience. Get started early, and find a quality wealth manager to help you invest wisely for the long-term. You may not become a billionaire, but you might find that you retire a whole lot more comfortably.