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9 Can’t-Miss Secrets Behind Warren Buffett’s Wealth

9 Can’t-Miss Secrets Behind Warren Buffett’s Wealth

Studying the success of investors like Warren Buffet is a cottage industry. A search for “Warren Buffet” on Amazon shows over 700 book titles. As one of the most successful investors in history, it makes sense to explore the principles and ideas he used to achieve his wealth. What characterizes Warren Buffet?

1. He Is A Dedicated Student of Investing

For investors simply looking to earn average returns, Buffet recommends investing in index funds (e.g. a popular type of index fund invests in the S&P 500 stock index). What if you want to join Buffet in seeking to very high returns, in excess of the market?

Be prepared to study and learn to follow in Buffet’s footsteps. Buffet’s study of investing goes back decades to his time as a student at Columbia when he studied with Ben Graham, author of The Intelligent Investor. Learning the details and methods of investing are the first secret of Warren Buffet’s wealth.

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2. He Stays True To His Principles Even When They Are Unpopular

Do you remember the “Dot Com” era of the late 1990s? From an investing standpoint, the Dot Com era was strange indeed. Many people bought shares in companies that had little revenue or profit. At that time, Buffet avoided these trendy investments. That decision led some to question his judgement. In 2001 BBC article, Buffet points that, “investors had been hypnotised by the staggering ascent of tech stocks and ignored everything else, including whether the businesses they were investing in were making money.”

3. He Improved His Communication Skills Through Training

In order to have money to invest, Buffet understood that he had to increase his income and professional skills. When he was in his early 20s, Buffet took the Dale Carnegie course to improve his speaking skills. To keep his skills sharp, he then took up a part time teaching role at the University of Omaha. Public speaking is a skill that most people can learn with practice and training.

4. He Reads For Hours Each Day

“I read 500 pages like this every day. That’s how knowledge builds up, like compound interest.” – Warren Buffet

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Daily reading is a key habit for Buffet as he seeks new information and opportunities. He reads far and wide: multiple newspapers each day, large numbers of financial reports on potential investments and books. For example, he reads The Wall Street Journal and Financial Times every day (his billionaire business partner Charlie Munger prefers The Economist).

Reading reports, books, newspapers and other material each and every day is much like compound interest. Over time, the knowledge he learns compounds and yields greater insights. Daily reading is a wealth secret that anyone can practice with the right discipline.

5. He Practices Value Investing Principles

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” – Warren Buffet

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There are many different investing approaches on the market: dividend investing, index fund investing, value investing, and so forth. Buffet’s approach is fundamentally based on the value investing principles developed by Ben Graham in the mid 20th century. According to Investopedia:

Value investing: The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company’s long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated.

The great challenge lies in identifying the intrinsic value of a company and then having the courage to put your money on the line.

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6. He Builds Wealth Slowly

Unlike the technology entrepreneurs of today, Buffet earned his wealth slowly over many decades. Attempting to get rich fast is a recipe for disaster that tends to lead people to taking foolish risks.

7. He Limits Personal Indulgences

Buffet is well known for spending relatively little of his fortune. For example, he still lives in the same house in Omaha that he purchased in the 1950s. Buffet is an expert at resisting lifestyle inflation. After all, if he spent all of his fortune, there would be less available to invest.

8. He Knows His Limits

Despite the potential opportunities, Buffet has steered clear of investing in high technology companies. Why? Buffet argues that investing in innovations tends not to produce good returns. In a famous 1999 Fortune Magazine article, Buffet pointed out that the automotive industry was one of the most innovative developments of the 20th century, changing the daily life of millions of people. Yet, a very large portion of American automobile companies have disappeared – a fact that should give pause to investors. Given the difficulty of successfully investing in innovative companies, Buffet tends to avoid them.

9. He Started Earning Money As A Teenager

Growing up, Buffet was determined to earn money. When he was seventeen years old in 1947, he earned $5,000 delivering newspapers (equivalent to $52,000 in 2013 income terms according to Measuring Worth). Making money and managing money effectively are skills that take time to develop. Buffet did himself a favor by starting young

Featured photo credit: Dollars/RabidSquirrel via pixabay.com

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Bruce Harpham

Bruce Harpham is a Project Management Professional and Founder and CEO of Project Management Hacks.

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Published on July 4, 2018

Top 10 Recommendations on Money Management Apps

Top 10 Recommendations on Money Management Apps

Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

The solution is simple, save more and spend less. But, we all know it’s easier said than done.

One problem is finding quality apps that save you time and money, and aren’t just hype.

Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

1. Personal Capital

    When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

    Here are some of its main features:

    • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
    • Discover hidden fees and how much they’re affecting your retirement plan
    • Wealth management for investors requiring a long-term strategy

    With Personal you’re free to track your expenses and net worth.

    Available for: iOS and Android

    2. Mint

      If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

      Here are some of its main features:

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      • Effortlessly track all your bills and balances in one dashboard
      • Categorized expenses to understand where you spend your money
      • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

      Feel at ease with managing your money by a reputable company that isn’t going anywhere.

      Available for: iOS and Android

      3. YNAB

        Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

        Here are some of its main features:

        • Easily sync all bank accounts in one place
        • Visually see your debt paying progress with eye-catching charts and notifications
        • Customized categories setting saving goals

        The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

        Available for: iOS and Android

        4. Wealthfront

          Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

          Here are some of its main features:

          • Variety of investment account options including IRA, Roth IRA, and more
          • Your portfolio composed of 7 different asset classes
          • Automatically rebalanced portfolio
          • Daily tax loss harvesting

          Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

          Available for: iOS and Android

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          5. Clarity Money

            If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

            Here are some of its main features:

            • Easily cancel subscriptions with one click
            • Synchronize bank accounts fast
            • Transfer money effortlessly between different accounts

            Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

            Available for: iOS and Android

            6. Acorns

              What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

              Here are some of its main features:

              • Automatic contribution option
              • Customized portfolio tailored to your needs
              • Low management fees ranging from $1-$2 per month

              Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

              Available for: iOS and Android

              7. Albert

                Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                Here are some of its main features:

                • Receive notifications for overpayments, hidden fees, and low balances
                • An Automatic budget that’s built around your spending and income
                • Easily track debt and set new financial goals

                While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                Available for: iOS

                8. Prism

                  Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                  Here are some of its main features:

                  • View all your account balances in one glance
                  • Bill due dates are automatically pulled and tracked
                  • Receive early reminders for upcoming bills

                  If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                  Available for: iOS, Android, Windows, Amazon

                  9. Mvelopes

                    Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                    Here are some of its main features:

                    • Connect unlimited bank accounts
                    • Real-time budgeting with auto transaction syncing
                    • Low monthly $4 fee or $40 annual

                    Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                    Available for: iOS and Android

                    10. Wallaby

                      Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                      Here are some of its main features:

                      • Automatic recommendations for the best credit card to use for each transaction
                      • A friendly user interface, displaying credit cards with their corresponding images
                      • Free to use

                      If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                      Available for: iOS and Android

                      Take control of your finances and experience financial freedom

                      Picture yourself staying on budget and saving more money than you’d ever imagined.

                      It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                      You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                      Featured photo credit: Pexels via pexels.com

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