Warren Buffett reveals the top ten secrets of fortune

 

 

1. reinvest your profits. "even a small sum can turn into great wealth," Schroeder writes, If you're disciplined to not touch your profits. let the power of compound interest work for you .
1. Reinvest your existing wealth. As shord wrote: " A small amount of money can become a great fortune. "-- As long as you manage your money. To make compound interest (Compound interest) Help you make money.

The basis for interest calculation is the principal plus the previously accumulated interest, which is relative to the single interest. The latter means that the interest is only calculated based on the initial principal. " Annual compound interest "(Compounding annually) The interest of the current year is included in the interest calculation basis of the next year only at the end of the year. For example 100 Pound, with an annual interest rate 10% That can be obtained after one year 110 Pound. If the billing method is used, you can obtain 120 Pound, three years later 130 Pound, while compound interest calculation also includes the interest of the previous year into the interest base, that is, two years later. 121 Pound, three years later 133.10 Pound. Compared with the billing method 3.10 Pound interest is the result of compound interest.

2. Be willing to be different. Don't follow the herd. Do what is best for you and your situation.

2.Be willing to be different and distinguish yourself from other beings. It is a good thing for you and yourself.

3. never suck your thumb. ah, how I cocould learn from this one. buffett makes decisions quickly based on the available information. I tend to sit and stew about things. acting decisively can give you an advantage and prevent procrastination.

3.Never suck your fingers. Amount......How should we understand this? Buffett will make a decision quickly based on the existing information. I tend to sit down and take things into account. Decisive decisions can give you advantages and avoid delays.

4. spell out the deal before you start. I stress this all the time: don't sign a contract unless you 've ve read it (especially not a mortgage ). read the fine print. understand the what you're re getting yourself into .

4. you must understand before making a transaction. I'm so tired of it all the time: I must read it clearly before signing the contract ( especially when the contract is not installment payment ) . Read the terms clearly at and know what you are about to do.

5. watch small expenses. while it's true that the big things matter, the little things do too. frugality is an important part of personal finance. but this principle also applies when investing, which is one reason I'm a fan of low-cost index funds.

5.Be cautious about low overhead. It's important, but it's also true. Thrift is an important part of personal financial management. This principle applies to investment, which is why I like low-cost index funds.

Index funds are the main form of passive management of investment funds. Sometimes they are used to refer to all passive management of investment funds. Broadly speaking,ETF (Exchange Trading Fund)It also belongs to the index fund.

The index fund's investment philosophy is to select a part of qualified securities in the securities market, which can pass objective criteria ( Such as total capital, total share capital, transaction volume, main business ) Selected or subject to subjective criteria ( Such as growth, the extent to which the market is undervalued ) Selected; the selected securities constitute an index, and each securities has a fixed weight. ( That is, the proportion of the securities in the entire portfolio ) The index fund manager buys securities based on this index and establishes a portfolio that is exactly the same or basically the same as the index, thus creating a one-region index fund.

If the Investment Index Fund makes a negative investment, it mainly selects the target index which has the ability to invest and the tracking error is small, so it does not have to look too much at the temporary income.

6. limit what you borrow. "living on credit cards and loans won't make you rich," writes Schroeder. sure, leverage can get you into a home or a new car, but too much debt is one of the biggest drags on your financial well-being .

6.You must limit the amount of money you want to borrow. Sinord wrote"Credit card and loan alone will not become a rich man."Of course, a little trick is to help you buy a house or a new car, but excessive borrowing will break your financial balance.

7. Be Persistent. If you know what you're doing is important and right, stick to it. doggedly pursue your goals. Learn to "fail forward".

7. stick to it. If you know what you are doing is important and correct, stick to it. Persistently pursue your own goals. To learn " forward wrestling " . ( Note: that is, learn from each error )

8. know when to quit. the other day, I wrote about the danger of the sunk-cost fallacy. just because you 've already paid $10 to see Indiana Jones and the kingdom of the crystal skull, doesn' t mean you should sit through to the end. be willing to cut your losses and walk away.

8.You need to know when to exit. I once wrote about the danger of sunk costs. Because you have already paid ten yuan to go and see the raiders.4Does not mean you have to read it. Be willing to cut meat and flash people.

used in economics and business decision making " sunk costs " (sunk cost) On behalf of the already paid and unrecoverable costs. Sunk costs are often compared with variable costs. variable costs can be changed, while sunk costs cannot be changed. In micro-economics theory, variable costs must be considered when making decisions. If both sunk costs are taken into account ( This is considered wrong by micro-economics theories ) , the conclusion is not based solely on the value of things. for example, If you reserve a movie ticket, I have already paid the ticket and assume that I cannot refund the ticket. At this time, the price you pay cannot be recovered. Even if you don't watch a movie, the price of the movie ticket is counted as your sunk cost.

9. assess the risks. "asking yourself 'and then what? 'Can help you see all of the possible consequences when you're struggling to make a demo-and can guide you to the smartest choice . "

9. evaluate risks. Ask yourself " what is the result? " , this helps you understand all possible consequences when you struggle to make a decision and guide you to make the most informed decisions.

10. know what success really means. success is different for each of us. find what it is that brings meaning to your life, what makes each day important. make this your focus. buffett says: "when you get to my age, you'll measure your Success in life by how much of the people you want to have love you actually do love you. that's the ultimate test of how you 've ve lived your life . "

10.What is true success? Each of us has a different definition of success. Find the one that really makes sense to your life and affects every day. Focus on it. Buffett said:"When you get to my age, you will reevaluate your success, and you will care about whether the people you want to love really love you. This is the ultimate test of how your life passes."