Warren Buffett – 7 Ways To Be Rich Like Him
Warren Buffett – 7 Ways To Be Rich Like Him
By Joseph Ezie Efoghor
Warren Edward Buffett popularly known as “The Oracle of Omaha” or “The Sage of Omaha” is the 3rd wealthiest man in the world currently. He was previously ranked number 1 in 2008 and number 2 in 2009. He is only ranked below Mexican Telecoms Billionaire, Carlos Slim (Number 1) and Bill Gates (Number 2).
He was born on August 30th, 1930 to Mr Howard, a stock broker -turned congressman. He started showing interest in business and money at a very tender age.
He had a steady rise to business stardom by trying his hands on a variety of businesses, and correcting his mistakes. He sold chewing gum from door to door as a child; he also sold weekly magazines, stamps, golf balls, detailing cars, etc while in school.
At age eleven, he bought three preference shares of cities service at $38 per share for himself and his elder sister Doris. The share later fell to $27 and then rose to $40. He quickly sold the shares out of panic, only for the share to rise to $200 later. That mistake thought him how to be patient while doing business.
He was later mentored by Ben Graham who had earlier learnt to invest in cheap stocks that were almost completely devoid of risk. The experience he acquired from Ben Graham propelled him into investing in stocks of several great companies later.
A look at his life showed that at the age of 15 (1945), he bought a pinball machine with his friend, which they placed in a local barber shop; within a few months, they were able to buy several more machines and placed them in different barbers’ shops. In 1950, at the age of 20 years, he had saved $9,800. He became a millionaire in 1962 at the age of 32 years; he became a billionaire in 1990 and eventually the world’s wealthiest man in 2008.
The legendary investor is the chairman and CEO of Berkshire Hathaway (a textile company): he is an investor, industrialist and philanthropist. He has shares in several companies including GEICO, Washington Post company, ABC, General Electric, Burlington Northern Santa Fe Corp, Goldman Sachs, Dow Chemical, Procter and Gamble Co, Johnson and Johnson, Verisk, WESCO, Sanborn Map company, etc.
What has been responsible for his business success?
1. Patience: Warren Buffett learnt through the hasty sale of his Cities Service’s shares, that patience is the nucleus of business success. Ever since, he never sold any shares as a result of a small change in business expectations or projections; he never did anything out of panic anymore. He is always ready to wait for the right change to come. So if you want to be like him, you must learn to be patient.
2. Wise investment: The Oracle of Omaha never invests anyhow; he takes his time to study the company he wants to invest in – he checks their track records, their balance sheet, the worth of their shares, etc before making his moves. So be wise enough if you must be like him; know when to grab opportunities.
3. Focus: Warren Buffett is a very focused investor who knows what he desires to be at a given period, and mobilizes his resources to pursue his goals. Once he starts he does not get distracted. He follows his plans and makes sure his dream is met. When he needed to invest in stocks, he took time to visit the Stock Exchange; met with Ben Graham to discuss the prospects of investing in his company, etc. So remain focused and don’t let anything distract you from your dreams.
4. Mentorship: The sage of Omaha did not just jump into buying stocks; he took time to learn the rudiments of the business. He was mentored by Ben Graham and Phil Fisher even though his father was a stock broker. He took time to understand the principle that separated the super investors from the other investors. You need to get an experienced person to mentor you. It makes things easier for you.
5. Re-investing: He invested and made profits. The profits from his investments were re-invested. For example, when he bought the pinball machine, the profits he made from it were used to buy several machines within a few months. So don’t waste your profits; re-invest them and they would gradually move you up the ladder of business success until you become like Warren Buffett.
6. Frugality: Even though the legendary investor is very wealthy, he does not waste money: he tries to live a modest life and spends money only on things that are truly necessary. He tries as much as possible to conserve his wealth. If you must retain your wealth, you have to be frugal; acquire goods and services in a restrained manner and make sure you use your economic goods and services to achieve longer goal terms in a resourceful way.
7. Risk taking: He is a risk-taker; he ventures into areas where some of his competitors are afraid to go into. He sees an opportunity in periods of market fluctuations and invests when he is convinced it would be to his advantage in the long run. You should also not be afraid to take risk especially if you are sure it would turn out to be worth it in the long run.
Joseph Ezie Efoghor is a small business manager with an enviable track record. For more of his articles visit http://smallbiztricks.blogspot.com
Article Source: http://EzineArticles.com/?expert=Joseph_Ezie_Efoghor
To Become Wealthy Is A Journey – Enjoy It
To Become Wealthy Is A Journey – Enjoy It
By Raman Kuppuswamy
To become wealthy is the dream of almost every one. But, some people are able to achieve this aim but many fail, however hard they try. If you are one among the multitude who wish to become wealthy, you should understand that it is possible but only if you change your mindset and adopt a few steps.
– The first step for becoming wealthy is to change your mindset. You should understand that money has its own traits and it works in a certain manner. Money resembles animate things which means that whenever you are awake, your money also keeps awake. As you can use your energy and potential and work, money can also work. But, you should make it work. For making it work, you should have it, for which you should save every possible dollar. When you save like this, you can make it work hard as if you are making your employees work hard for you. As employees work hard and make the employer rich, your money can also work hard to get you more money. You can reach a stage when you will not do any work and your employees will only be working to make you richer and richer. Likewise, money will also start working on its own to make you wealthier.
– You may have a misconception that you should save only substantial amounts. But, even small amounts will do a world of good in making you wealthy. It is not necessary that you should become miserly. If you do an honest analysis, you will find that you are spending money on many unnecessary things. So, you can definitely save if you take a few prudent steps. Even small amounts will take you a step closer to your financial freedom. As pointed out earlier, money is like your employees and you can make it work for you. Once you get your financial freedom, you can lead a life free from financial worries.
– There are people who nurture another wrong notion that they will have to wait for years for accumulating a huge wealth. According to them, it is better to enjoy the present with whatever money they have instead of making investments and waiting for years. These people forget the basis principle that “small drops of water make a mighty ocean”. They should look at their past and realize that they are in their present status only because they did not take the route of investment in the past.
– A prudent step for becoming wealthy is to invest in stocks instead of investing in products. When you are buying shares of companies and not the products these companies are manufacturing, it is as though you are buying the company itself. If you make such investments, you are sure to become wealthy. But, if you continue with your habit of buying products, there may not be any substantial improvement in your financial status.
– Money begets money and you should take steps to get into that cycle. Once you succeed in making money work with a sustained power and continuity, you will see miracles happening very soon. Another point you should remember is that you should not get into a race with money. To elaborate this point further, you can imagine a situation where you require more money for more needs. When you start earning this extra money, your needs will grow bigger. You may again want to earn more. Thus, it will become a vicious cycle. You can never win a race with money. You should aim to use the money you have judiciously so that it earns on its own and grows bigger.
– You should stop following the wrong people. There are a lot of self-made rich people. You should observe their methods closely and emulate them. If you tell your intentions of becoming wealthy by saving every dollar you can to wrong people, they are sure to heckle at you. So, it is better you take the right steps silently, adopt the steps of successful people suitably and become wealthy like them.
– When you are able to accumulate enough savings, you can pay back your debts. You should start with those debts with the highest interest rates and pay back one by one in that order. Once you clear your debts, you can move faster on the track to financial freedom. You should continue to save and invest in risk-free shares that can get you good returns. This will help you to become wealthy soon.
– Becoming wealthy is only a journey, not a destination. You should keep moving on your track with focus. Once you are determined to bring your finances under your control, you are on the right path to financial freedom. But, making this decision is very vital. After you make this decision, you should not worry. Every dollar you save will take you a step closer to a rich and fulfilled life. The fact of the matter is that if you start taking firm steps, you will definitely enjoy this journey.
Raman Kuppuswamy writes articles with a lot of insight. You may kindly visit http://hubpages.com/profile/dreamdamodar and http://www.blogger.com/profile/11388339850449905695 and read his articles/blogs on various topics.
Article Source: http://EzineArticles.com/?expert=Raman_Kuppuswamy
I am a Clinical Lab Scientist, entrepreneur, investor and trader (stocks and Forex). I enjoy writing and publishing articles online.