Here are Buffett’s most important quotes on investing success.
the main points
- A $1 investment in Warren Buffett’s Berkshire Hathaway in 1965 would be more than $3.64 million today.
- Buffett’s investment wisdom and quotes on how to be successful includes starting early, never losing money, and never letting your emotions get in your way.
- He strongly believes that people need to invest in themselves and think long term to achieve their goals.
Warren Buffett is one of the most respected investors of all time. Since taking over Berkshire Hathaway in 1965, he has generated an average annual return for investors of more than 20%. Over the same time period, the S&P 500 is back 10.5%.
To put this in perspective, $1 invested in the S&P 500 in 1964 would be worth $30209 by the end of 2021, but $1 invested in Berkshire under Buffett would be more than $3.64 million. That’s 120 times more than the S&P. What is the key to Buffett’s success? Here are some of his best tips, as well as some memorable quotes.
Don’t lose money
“Rule #1: Never lose money; Rule #2: Don’t forget rule #1.”
The more money you lose or don’t have now, the more impact it will have on your ability to earn money in the future. Every dollar you lose or spend is a dollar you don’t have to invest. This is why Buffett drove an old Volkswagen Beetle even after he made his millions.
I started early
“I made my first investment at the age of eleven. I was wasting my life until then.”
The secret to investing is to start early and get your money multiplying for you. Even if it isn’t much, in the long run, time is more important than the return or the amount invested.
Don’t let emotions get in your way
“Investors must remember that excitement and expense are their enemies. And if they insist on trying to time their participation in stocks, they should try to be afraid when others are greedy and only greedy when others are afraid.”
Buffett’s success depends on patience, discipline, and avoidance of emotional investment. When his right-hand man, Charlie Munger, was asked at the annual meeting how to explain Berkshire Hathaway to a 13-year-old, he said, “We’ve always tried to stay sane when other people go crazy. It’s a competitive advantage.” Good investors won’t let emotions get in the way.
Think long term
“I never try to make money from the stock market. I buy on the assumption that they can close the market the next day and not reopen for five years.”
Buffett constantly emphasizes investing in the long term. You want to buy a company that will grow regardless of the stock price. Many investors buy stocks based on historical performance. “Today’s investor is not benefiting from yesterday’s growth,” Buffett stated. You want to buy a stock for its potential growth, not the growth you’ve already seen.
invest in yourself
“The best thing you can do is be exceptionally good at something…so the best investment by far is anything that develops yourself.”
Buffett has always been an advocate of increasing your human capital. Your human capital consists of things like education, professional experience, financial knowledge, and your health. During the 2008 financial crisis, Buffett stated that “the best thing you can do is invest in yourself” by honing your skills and focusing on being at the top of your field.
Investors around the world continue to refer to Buffett’s advice and quotes like these for inspiration and knowledge. And that really says something.
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