When you think of millions and real financial success, it is inevitable to think of Warren Buffet. And there are several things you can learn from the best investor in human history that will help your personal finances like you have no idea…
He’s is worth over $74 billion USD, a massive sum that pretty much proves its talent and skills when it comes to investing and finances. What could be better than learning from someone like him? That’s why this article will share with you his teachings that you can easily apply to your own personal finances.
Create an Emergency Fund:
According to Warren Buffet an emergency fund won’t solely help you during bad days, but will also help you to take advantages of very good deals. If you read excellent websites like Market Review, then you will be one of the first to know about such opportunities, where you can use your emergency fund.
Let’s the current crypto-currencies market as an example (September, 2017). Pretty much everything is in red and the bearish trend seems to remain strong and ongoing with no signs of recovery. Now let me know: wouldn’t it be awesome to have an emergency found to take advantage of opportunities like this? After a market recovery – and considering you invest into good crypto-currencies – you could generate an important return of your investment.
Therefore, if you want to succeed in the world of investments and finances, then you should create an emergency fund now!
Warren Buffet himself keeps $20 billion in Berkshire’s Hathaway’s bank. Not all of us can put so much into an emergency fund, but any amount will do
Informed Decisions vs. Risk:
One of the things thing you can do to improve your personal finances and pretty much any aspect in your life is to take informed decision, because according to Warren Buffet, risks comes from not knowing what you’re doing. Don’t be that person, because it can hurt your personal finances badly.
Always know what the risks are, and if you accept them, then you are free to go for it. But the worst thing you can do is to take uninformed decisions. That will cause you more problems than any other thing, and we all know that money problems are of the worst kind.
Always Plan Your Investments: Aim For The Long Term
Just like Warren Buffet aims for the long term with his investments, and therefore plans them very well, you can do the same with your personal finances and obtain marvelous results.
You must have a detailed plan on how much money you are spending in your day-a-day and month-to-month. Moreover, looking at the bigger picture also involves saving for your retirement because it is never too late to start doing so.
Something as simple as planning your budget and your spending will have a massively positive impact in your life, because when there is tracking and order it is much easier for you to avoid spending money on unnecessary things, and instead, start putting that money to better use.
Price Doesn’t Mean Value:
A frequent misconception amongst people is that price is inherently linked to value, but in many cases it is not true.
Citing Buffet’s words: “Price is what you pay; value is what you get” this piece of wisdom can be used for investing in stocks as well as personal finances, because it is translated into this: understand if what you are buying is truly worth the money.
When investing or buying something ask this to yourself: “Does it have any real value?” If so, go for it. This simple piece of advice will help you to use your money in a much smarter and productive way.