Here are Buffett’s top quotes on investing success.
- $1 invested in Warren Buffett’s Berkshire Hathaway in 1965 would be worth over $3.64 million today.
- Buffett’s investment wisdom and his quotes on how to be successful involve starting early, never losing money, and not letting your emotions get in the way.
- He strongly believes that people need to invest in themselves and think long term to achieve their goals.
Warren Buffett is one of the most respected investors of all time. Since taking over Berkshire Hathaway in 1965, he has offered investors an average annual return of more than 20%. During the same period, the S&P 500 returned 10.5%.
To put that into perspective, $1 invested in the S&P 500 in 1964 would be worth $30,209 by the end of 2021, but $1 invested in Berkshire under Buffett would be worth over $3.64 million. That’s 120 times more than the S&P. What is Buffett’s key to success? Here are some of the best advice he gave, along with some memorable quotes.
Never lose money
“Rule #1: Never Lose Money; Rule #2: Remember Rule #1.”
The more money you lose or have no money now, the greater the impact on your ability to make money in the future. Every dollar you lose or spend is a dollar you don’t have to invest. It’s the reason Buffett drove an old Volkswagen Beetle even after he made his millions.
“I made my first investment when I was eleven. I was wasting my life until then.”
The secret to investing is to start early and make your money work for you. Although it’s not a lot, in the long run, time is more important than return or amount invested.
Don’t let emotions get in the way
“Investors must remember that excitement and expense are their enemies. And if they insist on trying to time their participation in stocks, they must try to be afraid when others are greedy and greedy only when others have fear.”
Buffett’s success hinges on his discipline, patience, and avoidance of emotional investments. When his right-hand man, Charlie Munger, was asked at the annual meeting how to explain Berkshire Hathaway to a 13-year-old, he said: “We’ve always tried to stay sane when other people , a lot of them, go crazy. It’s a competitive advantage. Good investors won’t let emotions get in their way.
Think long term
“I never try to make money on the stock market. I buy on the assumption that they might close the market the next day and not reopen it for five years.”
Buffett consistently emphasizes long-term investing. You want to buy a business that will grow regardless of the stock price. Many investors buy stocks based on historical performance. Buffett says that “today’s investor is not taking advantage of yesterday’s growth.” You want to buy a stock for its potential growth, not for the growth it has already experienced.
Invest in yourself
“The best thing you can do is be exceptionally good at something… So by far the best investment is anything that develops you.”
Buffett has long been a proponent of increasing your human capital. Your human capital includes things like your education, professional expertise, financial knowledge, and health. During the 2008 financial crisis, Buffett said “the best thing to do is invest in yourself” by honing your skills and focusing on being at the top of your field.
Investors around the world continue to refer to Buffett’s advice and quotes like these for inspiration and information. And that’s really saying something.
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