golden rules of Warren Buffett to succeed in investing

Warren Buffett Rules for Success in Investing

Forbes published an article about Warren Buffett's rules for success   In investment and advice and secrets in the world of finance and investment.

Although there are many reasons for success in Warren Buffett's story, he has identified the secret of his greatest success to his lifelong learning. Throughout his 50-year struggle, the billionaire has never stopped learning new things. Here and there, but the path of success needs more than that, he needs the constant pursuit of learning new things every day.

"When a rich person meets an experienced person, the experienced person will become rich and the rich person will have the experience."

That's what Warren Buffett said on his eighty-eighth birthday when asked about the best investment advice he could offer.

Many people are far from investing, even though they are a major source of money, because they can not understand the market and its volatility. Or even some may venture to invest without a clear financial awareness to lose whatever they have sought to save.

Experience is certainly the key to being a successful investor, but if you do not have enough experience, it does not mean that you are far from financial success and profit from your investment.

  If you are a beginner and have no experience in this field and are looking to create a successful investment portfolio, we will give you a set of golden rules to let you know how to invest successfully.

Luckily you can always learn from success stories of successful and experienced investors, and the following rules are the rules given by Warren Buffett himself to the beginner in investment.

 

Warren Buffett Rules for Success in Investing

1. Diversification in investment is not always a good idea

Many successful investors emphasize the importance of diversification in their investments, but Warren Buffett disagrees with them.

Where he believes that diversification is directed at people who have no investment experience. But the expert investor chooses his investments on a long-term basis and must trust his investments.

Some investors are diversifying their portfolios because they fear a certain stock will fall. But that way, keeping track of current events that affect every company is very difficult. It is true that the investor through diversification reduces the risk of investment, but at the same time reduces the focus on each investment separately.

"You have to wait for the right opportunity to buy good stocks," says Warren Buffett. "When you look for this opportunity, the doors of success and wealth will open up to you.

2. Invest in yourself first

"The best investment you can make is to invest in your own abilities. Anything you can do to develop your capabilities or projects means a great potential for increased productivity. "

According to Warren Buffett, the best investment an individual can make is to invest in his or her potential. It is not the stock market that makes you make a lot of money, but the skills you learn within your career. So focus on yourself first, and develop your skills to be able to invest successfully.

3. Trust yourself to be a successful investor

Buffett says it's hard to trust your investment decisions. The person always tends to believe that others are right and he is wrong. But this belief does not make sense in investing, so you have to build your own abilities and trust yourself.

To be a successful investor, you need to overcome fear and not pay attention to what others say to you. You have to build up your knowledge and make the investment decisions yourself to start and start making profits.

4. Invest in the field you can understand

Warren Buffett says many people do not think much before making any investment. We are also advised to avoid investing in areas or projects that we do not fully understand.

Before you invest in a company's stock, you must first understand how this company achieves its profits and what are the key tools that affect its business with a period of not more than 10 minutes. If you can not understand all of this within 10 minutes, you should move on to evaluate another company in the same way.

For areas where it is not possible to meet the expectations of approximate for the future, such as fashion-conscious companies such as clothing, we advise Buffett not to invest in this case. If you think it's a bit complicated, all you have to do is look for other businesses to invest in.

5. Make sure you choose the correct news to focus on

One of Warren Buffett's best advice and investment rules is not investing too much in companies that appear in news headlines.

Buffett believes in rule 99-1, where most investors make investment decisions based on 1% of the financial news they follow. Thus, they quickly sell their shares whenever they encounter bad news.

6. Buying a company's shares means buying part of its business

Imagine that you are buying a share in the store near your home. Then in this case you will automatically think about competition, suppliers, prices and so on. You should also think about the place in addition to its competitive position in the market.

Also when you buy stocks, you need to think about all those things, just like people who run businesses do.

7. Learn from your mistakes and do not stop

Did you know that Warren Buffett during his work also made big mistakes when investing? But make sure that he learned from his mistakes.

Warren Buffett advises us to keep a record of the mistakes we have made so that we are fully aware of our mistakes and make sure that they do not repeat them again.

8. Do not be traded daily

The secret to getting a better return on investment is buying stocks and forgetting them. Buffett believes in the need to buy and insist on holding shares for a long period of time.

There are two basic principles here: (1) if you buy an undervalued stock, the share price will eventually come close to its real value; and (ii) if you invest in an outstanding project, the value of those shares will double over time.

9. Find your passion

You are lucky in life when you find it and you can’t guarantee you are going to find it on your first job, but once you find it, your life will change. Take the job you would take if you were independently wealthy, you are going to do well at it.
See also: 3 Practicals Ways to Find Your Passion

10. Hire well

It’s no secret that hiring is one of the biggest challenges of managing and growing a creative team. Remember that your people are your greatest asset.  Look for people with 3 qualities – integrity, intelligence and energy.

11. Don’t care what others think

“Care about what other people think and you will always be their prisoner.” – Lao Tzu. It’s normal to want to be liked and accepted.  However, this leads to people worrying too much about what others are thinking about them. This kind of excessive worrying can have a negative effect on your life. Do not let it prevent you from living your life to the fullest potential. Once you give up caring about other people’s opinion and thoughts, you will discover the real you, and that freedom will be like taking a breath for the first time.

12. Read, read, read

If you‘re one of countless people who don’t make a habit of reading regularly, you are missing out countless opportunities daily: The more you read the smarter you get. I remember reading last month that if you read one book a month on the same topic for 2 years, you will become part of the top 5 % experts in that topic, and that’s the real power of reading. Here are some of the books that Warren Buffett recommends – “Business Adventures: Twelve Classic Tales from the World of Wall Street” by John Brooks, “The Essays of Warren Buffett” by Warren Buffett, “The Intelligent Investor” by Benjamin Graham
Source: Business financial post

13. Have a margin of safety

The majority of investors will encounter various stumbling blocks and bad luck over their investing lifetime; a margin of safety will provide them with some protection in terms of preservation of capital when the going gets tough.

14. Have a competitive advantage

“Capitalism is all about somebody coming in and trying to take the castle. Now what you need is a castle that has durable competitive advantage” – Warren Buffet
A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

15. Schedule for your personality

Warren Buffet doesn’t like meetings, but he is building his businesses around his personality, doing it the way he prefers and enjoys. So find your productive mode, find your pace, find the sweet spot. You will be most productive once you find what works best for you.

16. Always be competing

The biggest business killer – complacency. Once you get that feeling of self-satisfaction, that’s when it gets dangerous, that’s when your competitors will run you over. So always strive for growth, always be on the move, otherwise your competition is going to outcompete you!

17. Model success

You can’t do it on your own, get that out of your head. There is one thing that successful people have in common; mentors. Having a mentor is said to be one of the most important keys to success. I believe this is especially true early on but is imperative at any point in your career.

18. Give unconditional love

In his profile for The Great Minds of Investing, Mr. Buffett speaks candidly about the most important reason for his success: the love and support he received from his father, Howard Buffett, a U.S. Congressman whom he revered. “My dad believed in me,” Mr. Buffett explains. “What I basically got from my father is unconditional love. Unconditional love is huge in this world … Whatever I did, he was all for it. It didn’t matter how much money I made or anything like that. It was just, ‘Do your best in whatever you take on.’ ”

 

According to Buffett, the time is a successful business friend. "If you are not ready to own shares for 10 years, do not think about owning them for 10 minutes," he says.

These were the most important rules of Warren Buffett to succeed in investing, so do not forget to share and publish with others to benefit everyone.