We are finally into the New Year and one thing that readily comes to mind is the plan that we have for the next 12 months.
After all the partying and enjoyment during the festive period, people definitely made New Year resolutions as we entered into 2019.
Talking about resolutions, to achieve some of these things, one needs a solid investment plan.
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So, below are 5 investment tips from the CEO of Berskshire Hathaway, Warren Edward Buffet, who is the third richest man in the world:
1. Invest in a business you understand very well
One of the main reasons why people normally venture into bad investments is because they do not understand the businesses.
To be successful, one should never invest in a business that you do not understand.
Do your homework, plan and research on what you want to invest in before making the step.
2. Never lose money
The essence of investing is to make more money, so you have to make sure that you don’t take any decisions to the contrary.
There is the need to take risks – calculated risks for that matter – to ensure you do not lose money.
Buffet warns against being frivolous when it comes to investments.
3. Never forget point no.2
The moment you forget the purpose of investing, then you are definitely heading for a ditch with your money.
No matter the business you invest in, you are there to make money so make sure you don’t lose focus on that.
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4. Don’t depend on single income
Buffet is known for using the popular adage “do not put all your eggs in one basket.”
In investment, this simply means, don’t depend on a single income to survive or cater for your needs.
There is the need to create a second source of income. This serves as a perfect ‘planning ahead’ for any future occurrences.
5. Keep things simple
There is a saying that goes, "cut your coat according to your size". This is applicable in investments too, in the sense that one must keep things simple.
You are the one who knows your prowess and your capital. Don’t try to imitate the extravagance of other businesses; just do what you can afford.
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