Who wants to be a millionaire? No one will say no to that question! Legendary investor Warren Buffett is now worth $100 billion. He hit that magic mark on March 11. The “Oracle of Omaha” still lives a simple life and his wealth strategies are based on discipline, patience and good instinct. Here are his 10 prosperity Rules that immigrants and indeed all entrepreneurs can learn from.
- It all starts with good communication
“Without good communication skills, you won’t be able to convince people to follow you even though you see over the mountain and they don’t,” Buffett once told a Stanford MBA student.
- Look forward, not to the past
Buffett famously stated in the 1950s that “the investor of today does not profit from yesterday’s growth.” This maxim still holds true today. According to Buffett, following past trends is much less important than identifying new opportunities. When deciding whether to invest in a company, focus on what’s in its future, not its history. So don’t stay stuck in the past.
- Innovate — Do not just follow the crowd.
Warren Buffett was never one to follow the herd. Adopting a herd mentality is a surefire way to get middling results. Buffett believes. “You need to divorce your mind from the crowd. To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible.”
- Live frugally
Buffett famously lives well below his means. He has been known to drive an older, modest car. He still resides in the house he bought in Nebraska, for $31,500 in 1958, and he picks up breakfast at a McDonald’s drive-thru almost every day. You can follow his example by looking for new ways to stretch your dollars. For example, as a newcomer, learn to shop around on almost everything before buying.
- Always be willing to learn new things
Warren Buffett begins each day by reading a newspaper.
Buffett likes to say that knowledge accumulates just like interest in the bank. He starts each day with a newspaper, and he reads books on various topics every day. Consuming information will not only influence your investing, but it also will prepare you for success in all areas of life.
- Know when to walk away
Don’t get the wrong idea — Buffett does sell stocks when he has to. Despite his overall success, he has bet on plenty of losers. The trick for long-term investing success is knowing when to walk away. Recognize when a stock is a genuine loser, so you can walk away and minimize your losses. Always know when a career path is on the wrong track.
- Think “loooooooong”term
Buffett says invest for the long term and don’t get caught up in the stock market’s day-to-day moves.“ Buy and hold” is a common, long-term investment strategy that calls for sticking with a stock even when it’s having a bad day — or month. You can apply the same lessons to other investment areas.
- Never invest borrowed money
When investing, use your own money. Buffett says it’s “crazy” to borrow. “It’s insane to risk what you have and need for something you don’t really need,” he told CNBC. If you borrow to invest, your strategies will be too closely tied to your need to repay the money. Some investments require long-term planning and holding out for growth, which is difficult with a debt hanging over your head.
- Dividends are key to long-term growth
Buffett’s company earns millions of dollars from Coca-Cola, in the form of dividends. Dividends come from reliable companies that consistently meet or exceed their goals. Their stocks may not make you a lot of money quickly, but their dividends can put your investing on autopilot.
- Remember, anything is possible
Buffett is known to plaster his walls with what he calls “instructional art.” This includes newspaper front pages with screaming headlines about stock market crashes. They remind him that, in investing and in life, you need to be ready because anything can happen.
If you keep this in mind, then you’ll proceed with caution and make informed decisions about your investments. This way, you will avoid living an unsustainably lavish lifestyle and taking on debt you can’t handle.
Now that you know Warren Buffett’s Rules for wealth, just go do it or get started.