Wednesday, November 26, 2008

Warren Buffett’s secrets that can work for you

My mom sent me this article from the September 7, 2008 issue of Parade magazine highlighting some of Warren Buffett's financial "secrets." With the current economic status and the upcoming holiday season, I thought some tips from Forbes #1 ranking billionaire might be useful...

1) Reinvest your profits – Don’t spend profit, instead reinvest.
2) Be willing to be different – Don’t base your decisions upon what everyone is saying or doing. To be above average, you need to measure yourself by what he calls the Inner Scorecard- judging yourself by your own standards and not the world’s
3) Never suck your thumb – unnecessary sitting and thinking is called “thumb-sucking” Buffett prides himself on swiftly making up his mind and acting on it
4) Spell out the deal before you start – Your bargaining leverage is always greatest before you being a job – you have something to offer that the other party wants. – nail down the specifics of a deal in advance
5) Watch small expenses- vigilance over every expense can make your profits and your paycheck go much further
6) Limit what you borrow - living on credit cards and loans won’t make you rich- negotiate with creditors to pay what you can and then once debt-free work on saving money that you can invest
7) Be persistent- with tenacity and ingenuity you can win against a more established competitor
8) Know when to quit and walk away form a loss and don’t let anxiety fool you into trying again
9) Asses the risks – asking yourself “and then what?” can help you see all of the possible consequences when you’re struggling to make a decision
10) Know what success really means- “I know people who have a lot of money and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you’ll measure your success in life by how many of the people you to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”

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