Whether you’re a new or seasoned investor, you will appreciate these investing tips from Warren Buffett.
Warren Buffett is one of the most successful investors of all time. As of February 2023, his net worth is $107 BILLION. As you can imagine, he is full of valuable knowledge that we can all learn from.
Anyone who is looking to become a better investor will benefit from the wisdom that Buffett has shared throughout the years.
Some of these quotes serve as inspiration to START investing, while others will help investors understand the importance of patience and investing for the long term.
This post is all about investing tips from Warren Buffett.
7 Investing Tips from Warren Buffett:
Investing Tip #1: “Someone’s sitting in the shade today because someone plated a tree a long time ago.” – Warren Buffett
Warren Buffett is all about long-term investing. This quote perfectly represents this. Just as a beautiful big tree doesn’t grow overnight, you shouldn’t expect to get rich overnight. Making money from the stock market takes time. Start investing now so your future self will be able to enjoy the benefits.
Seriously, stop waiting and just get started!!!
Investing Tip #2: “The most important quality for an investor is temperament, not intellect.” – Warren Buffett
If you’ve ever needed a sign to invest, let this be it! You do NOT have to be a genius to invest. You don’t even really need to know too much about the stock market. You just need to understand the basics and have a good temperament. If you can remain level-headed and clear minded when the market is low, just as much as when the market is high, you can be a successful investor. Also, invest in low-cost, high quality index funds and ETFs.
Investing Tip #3: “Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett
When the stock market is doing well, others tend to get greedy and prices continue to rise. This is when you should be fearful/ cautious.
However, when the stock market is not doing well, others tend to get fearful. This is a great time for you to be greedy. Continue to hold your stocks and continue to buy more.
DO NOT SELL during a market crash. The stock market has always recovered from crashes. The way to make money in the stock market is to buy when prices are low, and sell when they are high.
Investing Tip #4: “Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.” – Warren Buffett
For a long time, I kept all of my money in cash in my savings account. I knew there was probably something better I could do with my money, but I didn’t understand the stock market and was nervous to get started.
Once I understood that inflation was literally decreasing the purchasing power of my cash over time, I knew I had to make a change and learn more about other options for what to do with my money. I took the time to learn about investing and started to make some changes right away.
IMPORTANT: Even though cash might “depreciate in value”, it is still important to always keep some in case of emergencies. You do not want all of your money tied up in your investments. Keep at least 3-6 months of cash on hand, ideally in a high-yield savings account, to use in case of an emergency.
Investing Tip #5: “The best chance to deploy capital is when things are going down.” – Warren Buffett
While you should not spend much time trying to “time the market” you should make note of when the stock market is going down. This is a great time to invest even MORE money in your portfolio of diversified ETFs, because it is essentially allowing you to get a product you already like for an even better price.
Many people are too nervous to invest during market downturns. But ask yourself this: if your favorite store had a sale would you take this as an opportunity to stock up on new items or would you try to return items you had already purchased for less than you originally paid? Hopefully the answer to that is clear!
Investing Tip #6: “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.” – Warren Buffett
When the stock market is doing well, people everywhere are talking about it. They describe how much their stocks have increased in value and how much money they’ve made. All this hype makes other people get more interested in the stock market as well which continues to drive prices up.
When the market is in a downturn, there isn’t that same excited chatter going on. This is an ideal time to buy those stocks you’ve been eyeing. You can think of them as being offered at a discounted price. You’ll be able to buy more for your money at times like these.
Or better yet- consider dollar cost averaging. Dollar cost averaging means you continuously buy stocks throughout the year without paying attention to the price. You will buy when the market is doing well and when the market is doing poorly. Over time, the highs and lows will average out.
Investing Tip #7: “Do not save what is left after spending; instead spend what is left after saving.” – Warren Buffett
The core essence of this quote is that you need to make saving a priority. There are several budgeting methods, but this quote is reminiscent of the “pay-yourself-first” budgeting method. This means you pay-yourself first, by allocating a certain amount of each paycheck to your savings and/or investments and then you are able to spend what is leftover in any way you choose. You won’t have to worry if you spend it all because you have already put aside your savings. Saving money should be a priority, so make it one by trying out this method.
{Learn more about how to create a budget: 3 Foolproof Personal Budgeting Methods to Help You Achieve Your Financial Goals}
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