Inc. magazine published an article describing the lessons we can learn from Warren Buffett one of America’s wealthiest businessmen (http://www.inc.com/drew-hendricks/12-life-lessons-we-can-learn-from-warren-buffett.html). Here are 7 of the lessons mentioned:
Lesson 1: Make wise investment decisions. Mr. Buffett chooses to invest in great companies with great ideas. He invests in companies such as Coca Cola, General Motors, Wal-Mart, Proctor & Gamble, GE, Johnson & Johnson, Kraft Foods, VISA, etc. (http://warrenbuffettstockportfolio.com).
Lesson 2: Don’t forget where you came from. Mr. Buffett started out as a newspaper deliver boy for The Washington Post when he was in high school. This relationship served him well over the years. His company has been one of the largest shareholders of The Washington Post.
Lesson 3: Live on less than you make. He still lives in the same house he bought in the late 1950s. It has been updated, but it is still the same home. He didn’t sell and buy a different home once his wealth grew and he could afford more. Oftentimes people live so frivolously they risk losing everything. Not Mr. Buffett. He chooses to live a frugal lifestyle and it has definitely paid off.
Lesson 4: First of all save, then you can spend. By saving first, he was able to build more wealth because he spent after he saved. Today we tend to have the mentality of spend first then if there is money left we will save. Unfortunately, this is an ineffective way to build wealth. Set up an automatic withdrawal from your account that goes into saving and investing. You won’t have to worry about putting the money in regularly if it is automatic.
Lesson 5: Research investments before putting your money there. Make wise investment choices by doing your research. If your research reveals that a stock is strong, you will be less afraid to put your money into it. Don’t just invest on a whim. Be an educated investor.
Lesson 6: Never give up! Sometimes it may seem like things just aren’t going to work out, but don’t give up hope. Keep making strides to turn your financial situation around. Small steps in the beginning become bigger steps along the way that will lead you in the direction you need to go.
Lesson 7: Stay in good company. We all know it’s true. People often judge you by the company you keep or in other words those you hang around with. Surround yourself with people who have the same ambitions as you. You should always strive to grow and not remain stagnant. Learn from those you admire who have achieved the things you hope to achieve. Glean from their pool of knowledge. If you want to have financial freedom, spend time with those who have already achieved this status. Find a financial mentor that is willing to spend time giving you advice that worked well for them.
You can apply these 7 lessons to your own life. One thing you can start with today is to choose a few investments that you are interested and spend some time researching the companies. Several resources I recommend for researching investments are:
Another action you can take today is to consider areas in your life where you can spend less in order to save more. Even a few dollars a day will help. To save just $1,000 a year you would only have to save $2.74 per day. Is there something you can give up in order to reach this goal? Only you can make that decision. What will you do today to change your future? I challenge you to find at least $2.74 today that you can save. The first step is usually the hardest so just take it day by day. Feel free to share your savings choices by posting to the comments section. Let’s see how creative you can be!