Warren Buffett's Top Investing Secret Is Simpler Than You Think
When it comes to making lucrative investments, chasing the latest trends isn’t always a great idea. Take Warren Buffett’s strategy, for instance.
Buffett -- arguably the most successful investor of all time -- currently has a net worth of more than $75.6 billion. He earned his fortune through stock investments and real estate purchases after he took control of the holding company Berkshire Hathaway (BRK-B) in 1965. His success as an entrepreneur and investor can be traced to his commitment to a single investment strategy, which continues to pay off year after year.
As you're developing your own investment strategy, consider taking some tips from this billionaire investor.
(By Sabah Karimi)
Warren Buffett’s investing secret
Buffett’s secret is longevity -- he maintains his best investments are the ones that outlast any trends. When Buffett makes an investing decision, he considers the long-term benefits.
“It would tend to be a business that for one reason or another we can look out five or 10 or 20 years, and decide that the competitive advantage that it had at the present would last over that period," Buffett said at the Berkshire Hathaway 2017 annual shareholders meeting.
How to apply Warren Buffett’s secret to investing
How to apply Warren Buffett’s secret to retirement accounts
Managing and contributing to your 401k is always a smart money move, but you still need to make informed decisions when choosing how much to contribute and how to allocate your funds. If you want to be rich in retirement, slow and steady growth could be the key. Putting money in the stock market -- like index funds with low fees -- is one way to do it.
How to apply Warren Buffett’s secret to buying a home vs. renting
How to apply Warren Buffett’s secret to buying a car vs. leasing
How to apply Warren Buffett’s secret to starting a new business venture
If you have an entrepreneurial mindset and want to explore a new business venture, keep the concept of longevity in mind. Invest your time, energy and resources into a business that you can sustain for at least five years.
Not surprisingly, 25 percent of startups fail within the first year -- and 55 percent fail by the fifth year -- according to Statistic Brain. Due to the fact that you likely have slightly more than a 50-50 chance of surviving the first five years, your plans for business growth need to go well beyond that mark.
How to apply Warren Buffett’s secret to buying computers
How to apply Warren Buffett’s secret to buying a smartphone
You’ll pay a lower price for a refurbished smartphone but you can’t bet on its longevity. A refurbished Apple cell phone comes with a one-year warranty but you’ll be responsible for paying all repair costs after that.
Once a warranty runs out, you could be paying up to $149 just to have its screen replaced. Make a wise investment by buying a phone that you can afford and one you won’t need to replace within the next few years -- unless your carrier offers free or discounted upgrades. By taking care of your phone -- with a quality case and screen protector -- you can make your pricey purchase last longer so it will cost you less over time.
How to apply Warren Buffett’s secret to buying clothes
How to apply Warren Buffett’s secret to buying furniture
How to apply Warren Buffett’s secret to buying food
If you consider the food you buy an investment in your health, it’s easy to see why buying healthy, nutritious and wholesome foods will pay off in the long run. From a longevity standpoint, you’ll want foods that keep you full and feed your body the nutrients it needs so you’re not craving junk foods and snacking on unhealthy sugars and processed foods. Eating well can also ward off costly health and medical bills.
Even if you're far from becoming a billionaire -- or millionaire, for that matter -- asking yourself if a purchase you make today will matter 10 or 20 years from now can help you avoid making impulse purchases in the moment.