Written by R.A. Stewart
Warren Buffett is a legendary investor who has valuable rules for investing your money; some of these are:
Do your homework
Be Consistent
Limit your borrowing
Keep things into perspective
Diversify your investments
Have an emergency fund
Stay disciplined.
I have written my thoughts about all of this, and as usual, it may not be applicable to your personal circumstances.
1 Do your homework
You need to understand everything that you invest your money in. Doing otherwise is simply inviting financial loss. Just investing in something because others are doing it or it is another bandwagon to jump on is a bad reason for investing in a particular stock. Keep in mind that when a particular company’s stock is rising, a lot of investors will jump aboard for the ride and inflate its true value.
2 Be consistent
Keep investing, that applies to putting money away for your retirement, building an investment portfolio, or saving for a rainy day. Learn to make sacrifices in order to make your dreams come true.
3 Limit your borrowing
Borrowing can kill off your chances of financial success if you let it. The worst kind of borrowing is consumer debt, often referred to as dumb debt. When one borrows for consumer goods, they are paying for something which if they sold, would be worthless than the money owing on it. With borrowing, the crunch always comes when you have to pay it back.
4 Keep things into perspective
Success means different things to different people. Supporting your favourite charities is a way of giving back to society, even if you are just starting out and don’t have a lot to give. You can still give your time. Be faithful with what you have today.
5 Diversify your investments
Placing all of your money in one company is called, “Putting all of your eggs in the one basket,” it could also be called “Stupidity,” It is inviting financial disaster. A common theme through many of the finance company collapses in New Zealand during the Global Financial Crisis is that many of the investors had their entire life savings invested in just one company. Many were left with destroyed retirement dreams as a result.
6 Have an emergency fund
It is sensible that one has an emergency fund to fall back on during times when cash is needed. This applies to everyone, whether one is a householder balancing the budget or in business.
7 Stay disciplined.
Keeping a disciplined frame of mind will help you stay on track. That includes staying in the habit of investing your money instead of frittering it away on things which do not add value to your life.
About this article
This article is of the writer’s own personal experience and opinion and may not be applicable to your personal circumstances therefore, discretion is advised. You may use this as content for your blog or website.
