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10 Useful And Profound Lessons From Warren Buffett You Need To Know

This article is about some of the great advice Warren Buffett has given over the years. Buffett has given advice not only on investing, but on leading a successful life in general. I have compiled a list of my personal favorites. Hopefully, some of this advice is helpful to you.

KNOW THAT THERE IS A DIFFERENCE BETWEEN AN INVESTMENT AND SPECULATION

To Warren Buffett, an investment is based on trends and what you estimate the return to be. He feels that if banning trading does not change the value, it is an investment.. Buffett mentions farming as being a true investment and he stresses the importance of making long term investments. He does not feel that speculation is a true investment. He says that speculation is when, “You’re just hoping that the next guy pays more.” (Buffett 2019) When asked how closely he follows companies he invests in Buffett replied that, “If you have to closely follow a company, you shouldn’t own it.”  (Buffett)

DON’T PLACE ALL YOUR FOCUS ON THE STOCK CHARTS

Buffett feels that when choosing a stock to purchase, you should not place all of your focus on the stock charts. He believes that you should look at the business as a whole instead of just focusing on the current value.

WARREN BUFFETT URGES YOU TO BUY INDEX FUNDS

Buffett specifically suggests the S&P 500 even stating, “In my view, for most people, the best thing to do is owning the S&P 500 index fund.” (Buffett  He is one of the best performers in that specific index fund. He believes that the trends support that this is a good investment practice.

WARREN BUFFETT SAYS YOU SHOULD INVEST IN YOURSELF

Buffett believes that one way to invest in yourself is by taking the time to become a more effective communicator. He believes that it is important to have good communication both verbally and in writing.

TAKE GOOD CARE OF YOURSELF

Warren Buffett believes in taking care of your mind and body. He also believes in eating the foods you enjoy eating. He stresses the importance of doing things you enjoy.

FOLLOWING THE RIGHT PEOPLE

Over the years Buffett has stressed the importance of emulating the right people. In a 2019 interview with Yahoo Finance Buffett stated, “Associate with people that are better than yourself.” (Buffett 2019) He believes that your friends and significant other can mold who you are as a person.

YOU CAN BE WHO YOU WANT TO BE

Buffett suggests that you make a list of the qualities you like most in your closest five friends and the qualities you dislike the most in five people you dislike. He believes that you are capable of developing the good qualities through emulation whilst avoiding display of the traits you dislike.

WARREN BUFFETT THINKS YOU SHOULD FIND YOUR PASSION

Warren Buffett suggests that you, “Take the job you would take if you were independently wealthy.” (Buffett) He believes that if you do what you really love to do, the money will follow.

KNOW YOUR MARGIN OF SAFETY

Buffett believes that you should know your “margin of safety” when investing and be adaptable enough to find another path. He only invests in businesses he completely understands

WARREN BUFFETT SAYS YOU SHOULD HAVE A COMPETITIVE ADVANTAGE 

Warren Buffett stated, “The nature of capitalism is that people will want to come along and take your castle.” (Buffett) As long as you are excelling in your field of expertise, your competitors will want to mimic your success with hopes of surpassing you. Buffett believes that your edge should be reduced cost or having more talent than your competitor. He compares this edge to a moat.

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