5 Warren Buffett Tips for Smart Investments

Warren Edward Buffett is an American businessperson, philanthropist, investor, CEO & Chairperson of Berkshire Hathaway and owns over 60 companies. Buffett was just 11 years old when he first entered the stock market and was 14 years old when he filed his tax for the first time. He is one of the most successful and respected investors in the 20th century. His net worth is over USD 10,000 crores. He has also written two books; The essays of Warren Buffett: Lesson for investors and managers, published in 1997, and Berkshire Hathaway letters to shareholders 1965-2012, published in 2012 in which he has mentioned many tips and tricks that he has learned on his way to success. Here are the top five tips based on the advice given by Warren Buffett.

Learn about your money

Knowing about your money is very important. Warren Buffett’s partner, Charlie Munger, once said, “Go to bed smarter than when you woke up.” Keep exploring new things about money and learn to manage your money before trying to learn to invest. It is not a rare notion that one must look for minimum risk while investing, and in Warren Buffett’s words, “Risk comes from not knowing what you are doing.”

Look for a high bargain price

Research about stocks as much as you can and only then decide where you want to invest. After that, wait for the shares to be available at a very high bargain. What you pay is called price, what you give is called value, and you should always get more than you paid. So, look for high value at a low price. Avoid investing in a particular stock because of recommendations or stock tips. Do a complete study of the stock in which you are planning to invest.

Look for quality, not quantity

There will be many stocks for which you may get a high bargain, but because it is cheap does not mean it is always good. Learn about the stock’s reputation and the capability it holds. All high bargains don’t mean good value.

Avoid credit card debts

Credit cards have a very high-interest rate, and it keeps adding 18 to 20 percent every month, which can also lead you on the way to bankruptcy. Hence, it is best to avoid credit card debt altogether. Keep paying your total due amount in each billing cycle.

The long-time game

Investment is almost like planting a tree. Today you are sitting in the shade because years ago, someone planted that tree. In the same way, give your investments a chance to grow instead of cutting it when it’s just a plant. The more you wait, the higher the investment value you gain. Warren Buffett once said, ” If you invest in a low-cost fund, where you don’t just put money in at one time but keep adding on for the next ten years. You will do better than 90 percent of the population who invested at the same time”.

These were five of Warren Buffett’s pieces of advice that can change the entire investment game for you.