Home Book trading This Unique Advice From Warren Buffett Could Save You Thousands Of Dollars

This Unique Advice From Warren Buffett Could Save You Thousands Of Dollars


Just last week, I read that the National Association of Business Economists predicts continued growth through spring 2022. And just when I was tempted to relax, I came across a video of a man. who got rich by selling his finance books. . This guy tells the world that the economy is going to collapse at any time, and if we are to survive, we have to buy gold – and its pound.

It’s information overload. Human beings are not designed to absorb and process so much information at the same time. Add to this that the information we receive is often contradictory, and it’s easy to see why people throw their hands up in frustration or panic, or they do something stupid in the hopes of saving their families. of an imaginary disaster.

During my years on this planet, I have learned that the best thing to do is usually the easiest and the least dramatic. I stick to tips that have served me well in the past and do my best to block out noise from people trying to elicit an emotional reaction or sell me another book that I don’t need.

When it comes to personal finance, I also try to remember the words of Warren Buffett, “the Oracle of Omaha” and one of the most sensible and successful investors in the world. Buffett offered all kinds of practical advice, including teaming up (and marrying) the kind of person you’d like to be. He also advises us to buy index funds, invest in ourselves, and remember that money is not everything.

But the one piece of advice from Buffett that has helped me stay the course when my nerves are on edge is this:

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Think long term

Whether you’re 22 or about to retire, investing is all about taking care of your future. It makes you a keeper of an old version of yourself. Strange as it may sound, being a tutor means making smart, measured decisions so that your older self has many assets to work with.

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Thinking long term means not allowing anything – including videos of guys shouting that the sky is falling – to get you off course. It means finding a broker and investing without hanging on whenever there is a market downturn. The term “let it roll” applies to much more than a card game in Vegas. This also applies to how you react to the inevitable bumps and bruises in the stock market.

A few weeks ago, I met some girlfriends from high school. It was fun to see them after decades apart, and interesting to observe how different we are, even though we came from the same place. A friend mentioned that her husband had decided that now was the time to withdraw all of their investments from their retirement plan. The couple believe we are on the edge of a financial cliff and on the verge of a tipping point.

My mind immediately began to spin and I found myself mentally calculating what was likely to happen if they decided to withdraw their investments in the middle of a bull market.

I’m pretty sure the steam didn’t come out of my ears, but it’s fair to say my mental calculations were intense. In the midst of this mental gymnastics, she added, “Of course the last time he cashed all of our investments, the value of the shares exploded and we lost a bundle.”

There you go, my friends: a successful investment is not about reading the tea leaves or trying to time the market. It’s about thinking long term and understanding that buying and holding is generally the wise decision, despite the ups and downs of the market.

That’s not to say that you should never polish your portfolio or that you should be totally passive. This means that you can take comfort in knowing that the annualized stock returns between 1971 and 2020 were 10.9%. Some of those years stank, and others were wonderful, but by the time things started, the investors who stayed the course were on the right track.

Next time I hear a talking head tell me that if I buy their book I could – I maybe could – survive the impending crash, I’ll do what has worked well so far: don’t forget Warren Buffett’s words and keep thinking long term.

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