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Throughout the years, the business magnate has shared a plethora of financial tips that helped him succeed in business.
In his letters to Berkshire Hathaway Inc.’s investors, Warren Buffet, 85, gave plenty of advice on financial success not only to shareholders, but to business executives, home buyers, and even to his successor, as well.
In each of those annual letters, the billionaire has also told investors what he wouldn’t do if he wanted to stay away from financial disaster. We handpicked some of the most significant.
On the stock market, he firmly believes that a relaxed attitude is the greatest asset. He recommends investors not to stay connected to stock prices 24/7, as games are won by players who focus on the game not on the scoreboard.
He also thinks that investors should not be quick to celebrate when stock prices are climbing, and not get distracted by macro-economic predictions. Plus, any investors should have a diversified portfolio and risk investing in other industries. He noted that a commonly made mistake of small investors is to invest money in the same place they had earned it before.
Plus, make sure that you have extra cash when you need it. Don’t rely on bank loans or the “kindness of strangers,” Buffet wrote in a 2010 letter. Additionally, the billionaire advises anyone not to bet against America.
“We will regularly grumble about our government. But, most assuredly, America’s best days lie ahead.”
he added in 2015.
For executives and regular people, he recommends not beating themselves over past mistakes. Instead, one should take full responsibility for any mistake and move forward. And don’t take the process of analyzing a mistake to see what went wrong and how it could get fixed for the habit of ‘agonizing’ over that mistake ad infinitum.
Don’t procrastinate. The best moment to act both in business and personal life is now. Plus, you should refrain from telling professionals what to do. The mogul said that at Berkshire no one ever told professional hitters how to swing.
To his successor, Buffett has a separate set of instructions. First, his successor should only worry about what he calls the ABC of a badly-run business: arrogance, bureaucracy and complacency. He deemed these three ‘cancers’ that should be stopped before they kill a business.
Second, his successor should not be greedy when it comes to fair compensation. He or she should not try to match the paychecks of their more generously-compensated counterparts, even though the latter may not achieve as much.
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