You want to be a great investor. Who would be your role model? The most likely answer “Warren Buffett”. So who is Warren Buffett? Warren Buffett is an American business tycoon, investor and a philanthropist. He is regarded as the most successful investor in the World. He is the CEO of Berkshire Hathaway Inc. an American multinational conglomerate. He was the World’s third richest person in the year 2015.
You need a pair of casual shoes very badly. You go out on a Saturday afternoon to buy these shoes. You see a beautiful leather jacket in one of the stores. You don’t need a leather jacket. The price tag is INR 7000. You still purchase it. You see a beautiful pair of sun glasses…. You buy it too. Then an awesome leather wallet…. You are an impulsive spender and a shopaholic. When you reach home, you are pretty much broke.
You better remember this saying by Warren Buffett.” If you buy things you don't need, you will soon sell things you need”.
So how can you become a wise spender? You must decide what you want to buy before you leave your home. Buy only this item. Make a shopping list and stick to items on your list. All your money will remain in your pocket.
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Emergencies strike without warning. They strike when you are least prepared. Remember the earthquake in Nepal and Manipur, floods in Jammu and Kashmir and the recent floods in Chennai? These are all natural calamities which struck without any warning.
You or your spouse or children, could suffer a medical emergency. You need money to settle the hospital bill. Better still avail a family floater health insurance plan.
A lot of Companies are downsizing and throwing out employees. Loss of job is common in these recessionary times. How will you pay your expenses if you lose your job? You need to maintain at least 3 months worth of living expenses, in your emergency account if you are single. If you are married, you need at least 6 months worth of living expenses.
You better remember this saying by Warren Buffett. “Don't save what is left after spending; spend what is left after saving”.
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You want to invest in the stock markets and make a lot of money. You buy any stocks you feel like, without doing your research, hoping that they will go up. This is not investing. It is gambling. Would Warren Buffett gamble with his hard earned money? You better remember this saying by Warren Buffett. “Risk comes from not knowing what you're doing”.
Investing in stocks gives great returns, but with high risks. If you invest in the stock markets without doing your research, you will face the full brunt of this risk. If you don’t understand your investment objective (why you are investing), then you better not invest in the stock market. You will only lose your hard earned money.
So learn these simple tricks from the great investor himself. Even Warren Buffett was not born a great investor. He made himself a great investor. You do stand a chance.
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