Invest and Billionaire – One of the pleasant facts in this modern era is the increasing number of people are beginning to realize the importance of investment as a way to manage personal finances.
The proof, we can see for themselves if the more topic talk show on television, radio, and even in many popular articles in the mass media, related investment Affairs. Starting from introducing various types of investments, such as gold, bank deposits, property, to mutual funds; up to a range of tips through this.
If it was based on a survey of the petty, a goal most people invest to double the money. There are even people who divert most of her savings into investment; and not a few are also the ‘ dizzy ‘ because it felt it was followed various tips but are still stuck, too. Because of the investment, it takes diligence, consistency, and dedication.
This Difference in Ordinary People How to Invest and Billionaire
Well, this question is related, maybe we can try to follow the existing standard invest from successful people such as the iconic investor Warren Buffett, United States origin; that figure is known as one of the richest men in the world, due to the sophistication in investing!
After your search, it turns out the key to Buffett in terms of investment was because he did not have such a principle most people who invest. Want to know what is the principle of Buffett? Try to find out the explanation:
The world is complicated, we must keep it simple thinking
As we are all aware of the current developments in the world, running very fast. Technology and new breakthroughs appear quickly, to entice investors. Because of course, there are always new things that appear and predicted would be great. Finally, many who are excited about infusing capital on stub it.
But, Buffett is not so. His mind is simple; He only invests in things that are already proven to be the major needs in the lives of so many people daily; for example, on food, drink, or energy. Then that Buffett invests in listed companies such as Kraft Heinz, Wells Fargo, and Coca-Cola.
It does not mean rejecting various innovations are popping up, Buffett just not easily tempted infuse capital in products predicted ‘ exploded ‘ in the market, and indeed do not have a clear consumer market.
How much simple. Those basic necessities of people will never drop; so he focused on businesses or producers who replied to the staples of yesteryear.
Invest and Billionaire With Learning about the field and the Manager of the business that will be implanted in capital
This point is also related to the previous considerations of yesteryear; Buffett feels if it’s important for him to recognize the fields of endeavor that will be embedded capital.
The meaning of this, many people often decide to invest once offered by the party yet they know well. They are tempted by the promise of turning its capital levels, so just decide quickly. In fact, they are not necessarily versed in their field such as what.
Thus, for Buffett rather than investing in cutting-edge technology, no matter how much the potential benefits, he prefers to infuse capital in consumer goods or clothing business, which might better understand it inside and out.
He openly stated if not willing to invest in the ‘ world ‘ are not known precisely. Because of her investment is not just a question of planting turnover and reception, but investors also must be sure and understand very well the business sectors that he chose.
An interesting fact, Buffett also felt the need to recognize managers, according to Buffett characters people are running a certain business will largely determine the success or failure of the investment that he did. If he feels the Manager is not capable, then Buffett will resign.
Understand very well the real value of a business or product
In addition to getting to know the field and managers, Buffett is also a very strict selection of effort or products so target its investments. He must really know the real value of owned.
For example, here’s the thing, with dynamic market trends and changing, there is always only the products or businesses that suddenly sticking so Prima Donna. And Yes, in accordance with economic laws, if the interest is increasing, then its value ever soared.
Most people will be tempted with such phenomena, and they invest their funds in a product or a popular line of business. In fact, the real value is not as high as it is.
How to do that sort of order to invest strongly avoided Buffett. He tried hard to find out the real value of their investment objectives. He always wanted to learn all the business files to find out the exact value. If he feels the real value is high, Buffett decided to invest their funds.
The market vulnerable affected news coverage from the news media, but Buffett despite the headline!
In the middle of the flow of information that is now the more profusely, one news on social media alone could trigger a polemic. This sort of thing often also affects the sector’s investment result there is panic or excessive enthusiasm for a thing.
But create a Buffett, he feels no need to be concerned with headlines or rumors circulating in the media. He staunchly on its founding, because he felt it was mature enough to think of investment measures.
As explained before, if there’s excessive enthusiasm for certain products or business, he saw the first and learn the real value of owned carefully, rather than direct passions infuse capital. Then, he also focused on the measurement of investment performance.
Also must understand how to measure investment performance
According to Buffett, many people rather ignore this. Those who invest and expect some positive feedback, thus not too understand how to assess their investment development.
Starting from the basic ways, to the ability to read a good financial report in order not easily dazzled by ‘ fantastic ‘ figures which appear on paper.
One of the media never reported when Buffett have a standard calculation for monitoring the growth of the value of its investments; i.e. the target return of at least 20 percent per year.
Invest and Billionaire With Do not expect a profit in quick time
In addition to taking into account the performance of investments, Buffett also does not expect profit in quick time. According to him, a mistake many investors is to not think long, and ultimately expect instant profits.
Related it, an investor should not be easy to panic if things are deteriorating, but also not easily tempted when there are products or businesses that suddenly popular in the market.
Buffett always invests a minimum of five years at the effort he instills capital. The thing that he does through a process that’s been discussed before, ranging from the choice of sectors of the business, get to know the field and managers, ensuring real value, and of course to monitor the performance of its investments as well.
And a series of principles from Buffett also actually not as complicated as imagined. In fact, we can use it for the purposes of our investment, though not his scale of the result is the Buffett.