Do You Invest Like Warren Buffett?

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Warren BuffettAs is true for many in the personal finance realm, I’ve always admired Warren Buffett. I mean, who doesn’t? Not only is he one of the richest people in the world, but he has been sticking to his guns of promoting common sense advice for decades – long before many of us were around.

Out of sheer luck, I happen to live about 10 minutes from Buffett in Omaha, Nebraska. Sadly, none of his wealth has transferred to me via osmosis, but that’s a different story for a different day. 🙂 That being said, I found this infographic at Visual.ly and knew that I’d want to share it here at Sprout Wealth.

I’ve spoken a lot about investing on the site, and rightfully so as investing is a vital part to growing your wealth. Whether that means starting to invest with less than $1,000 or learning what investments should be in our 401(k)s taking investing seriously is something we all must consider in order to get where we want to in life.

Wisdom From Warren Buffett

What I like so much about this infographic is the rich wisdom we can take from Buffett. You could argue that it’s easy for someone as wealthy as Warren Buffett to do well with investing, but that’s missing the point. Much of the quotes listed here display his discipline – a common sense approach to investing.

I know this approach may not be sexy. It may not be exciting. That’s not what investing in the stock market should be though. It should be done with an eye towards building wealth over the long haul instead of chasing gains. That’s probably why two of my favorite quotes from the infographic are:

  • “I think the worst mistake you can make in stocks is to buy or sell based on current headlines.”
  • “When we own portions of outstanding businesses with outstanding managements our favorite holding period is forever.”

Both of these highlight the need to view investing as a slow and steady approach and one that focuses on building a portfolio of solidly run companies or index funds. The first is a mindset and the second can be accomplished by investing in index funds or creating your own in a Motif Investing account or other brokerage of your choice. At the very least though, make sure you don’t forget the first rule, or the second rule for that matter, of money, as according to Buffett.

 

 

15 Words of Investing Wisdom from Warren Buffett

 
 
What is your favorite Warren Buffett quote? What is your holding period when it comes to investing? What do you believe is the #1 problem investors cause to themselves?

 

 
 

Photo courtesy of: Fortune Live Media

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10 COMMENTS

  1. That’s an awesome infographic!! When I talk to people about investments, they all want to hear the most exciting options with the biggest returns, but the truth is that slow and steady and buying low (even though psychologically people want to buy high) are the ultimate keys to success and exactly how Warren Buffett built his empire.
    Shannon @ Financially Blonde recently posted…Music Mondays – I SmileMy Profile

  2. Great infographic!

    Besides Buffett’s Rule #1 & Rule #2, this has to be our all time favorite: “Be fearful when others are greedy, and greedy when others are fearful.” Acting upon others impulses is the cornerstone to value investing and helps patient investors get great assets at great prices!

    Our family’s holding period on investments is forever, unless business results of said investment require a change in our investment thesis. We are in our mid-20’s, but so far we’ve held up to “forever” holdings! 🙂 We also subscribe to Buffett’s advice of don’t buy a stock (or any productive asset for that matter) that you wouldn’t be happy holding for 10 years should the market shut down and you can’t sell it.

    Most investors issues revolve around not having the patience when investing. In today’s society we want things NOW! But having the patience to sit on an investment will pay off over time! Personally, I have a stock I’ve been buying since 2011 who’s price has fluctuated but is currently below what I bought it for. All this does is present me with the opportunity to buy more of a great thing (business value has increased yet stock price has decreased). Heck ya! 😀
    K @ The Cash Lifestyle recently posted…Grow Net Worth at 12% per yearMy Profile

    • Thanks K!

      Great thoughts overall, and could not agree more on his view of buying when others are fearful. I practice the same thing as it can be a great opportunity to get a quality holding at a nice value.

      That patience is vital to have and you’re dead on that most want things now which only betrays what they’re saying they want in the first place. Unfortunately not everyone acts with the same cool wits and willingness to go against the grain of the herd.
      John recently posted…11 Awesome Frugal Family Fun Activities You Can Do For CheapMy Profile

  3. “Most institutional and individual investors will find the best way to own common stock is through an index fund that charges minimal fees. Those following this path are sure to beat the net results [after fees and expenses] delivered by the great majority of investment professionals.” Warren Buffett, 1996 – Shareholder Letter

    It has taken me a long time to come to accept this reality, but now I wholeheartedly embrace it. Indexing is the way to go. It is silly to think that I can consistently outperform highly-paid full-time professionals with the finest research teams on a long-term basis. I can get first-quartile long-term performance at little cost, worry, and effort. This is frugal investing at its best.

    Regards, Jason @ froogalism.com
    Jason @ froogalism.com recently posted…112 Random Acts of Kindness IdeasMy Profile

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