Warren Buffett is one of the best and most successful investors in the whole world. His success is an aid to be a perfect mix of many things, and so he has highlighted four success rules that a usual person should follow to be successful.
- REINVEST YOUR PROFITS
When you first make money, you may be tempted to spend it. Don’t. Instead, reinvest the profits. Buffett learned this early on. In high school, he and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stocks and to start another small business.
- NEVER SUCK YOUR THUMB
Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking “thumb-sucking.”
When Warren Buffett thinks he has a good idea, he doesn’t just test the water temperature with his toe; he goes all in. This is very rare in the investment world, in which many individuals will take small positions to track certain stocks or won’t allow any one stock to comprise more than 10% – or some other arbitrary percentage – of their total portfolio. Warren Buffett believes that when you’re presented with an opportunity, you must go after it with everything that you have. This means you can’t waste time – you must act!
- LIMIT WHAT YOU BORROW
Buffett has never borrowed a significant amount — not to invest, not for a mortgage. He has gotten many heart-rending letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you’re debt-free, work on saving some money that you can use to invest.
- KNOW WHAT SUCCESS REALLY MEANS
Despite his wealth, Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He’s adamant about not funding monuments to himself – no Warren Buffett buildings or halls. “When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”