Warren Buffett is estimated to be worth over $60 billion dollars and he is the seconds richest man in the entire world, but how did he get there. Was it luck? Absolutely not! Buffett credits his success to a number of key strategies so let’s have a look at some of them.
- You need to reinvest your profits – In the beginning when you are first starting to make money you may be tempted to spend it. You’ll need to resist and instead turn around and reinvest your profits. Warren Buffett figured this out very early because by the time he was 26 he was worth $174,000 and in today’s market that’s equal it $1.4 million
- You need to be willing to be different – You cannot base the decisions you are making on what others are doing or saying. When Buffett began to manage his money, back in 1956 he refused to tell anyone where he was putting his money and everyone (including his parent) was sure that he would fail. They were wrong. Buffett looks at what others are doing and sees that as the average and he’s not willing to be average. However, in order to not be average you must think and act differently than those who are average.
- Make sure you spell out the deal clearly before you begin. You have the most bargaining power before you start any job or project. That’s when you have what the other party wants. That’s the time to sit down and work out all the fine details. Make sure it’s in writing. You’d be surprised how many people will go back on their word once they have what they want.
- Watch the little expenses – The big expenses are obvious but it’s the small purchases that will eat up your budget and put you in the poor house. Use what you have wisely and reduce the waste as much as possible, because waste leads to lost wealth.
- Be careful how much you borrow – It’s best to not borrow at all. If you are living on your credit cards and your personal loans, you are never going to get rich. In fact, you are never going to get out of debt. If you find yourself in this mess it’s time to negotiate with creditors to pay whatever you can. Then once you are out of debt, begin to start to save.