10 Money-Making Rules of Warren Buffett That Can Help You Achieve Success

Warren Buffett's fortune recently surpassed $100 billion as shares of his company, Berkshire Hathaway, hit an all-time high. While it is an incredibly rare achievement, the Oracle of Omaha is actually a pretty simple guy who still lives in his hometown, eats fast food, and guzzles soda like a six-year-old. His strategies for smart investing are not too complicated, but his approach takes the kind of discipline and patience that many people either don't have or are unwilling to develop. In this article, we will take a look at 10 of his money-making rules and see whether you can be just a little bit like Warren Buffett.

Rule 1: Remember Anything Is Possible

Buffett is known to plaster his walls with what he calls instructional art. This includes newspaper front pages with screaming headlines about stock market crashes. They remind him that in investing and in life you need to be ready because anything can happen. If you keep this in mind, then you will proceed with caution and make informed decisions about your investments.

Rule 2: Dividends Are Key to Long-term Growth

Warren Buffett loves stocks that pay dividends. This company, Berkshire Hathaway, gets hundreds of millions of dollars each year from Coca-Cola in the form of dividends. Dividends come from reliable companies that consistently meet or exceed their goals. Their stocks may not make you a lot of money quickly, but their dividends can put your investing on autopilot.

Rule 3: Never Invest Borrowed Money

When investing, use your own money. Buffett says it's crazy to borrow; it's insane to risk what you have and need for something you don't really need. He told CNBC, "if you borrow to invest, your strategies will be too closely tied to your need to repay the money." Some investments require long-term planning and holding out for growth, which is difficult with a debt hanging over your head. You don't need much money to invest if you use a popular stock trading app that will allow you to buy fractions of shares for as little as one dollar or charge you lower to no commission on trades.

Rule 4: Think Long-term

Buy and Hold is a common long-term investment strategy that calls for sticking with a stock even when it's having a bad day or month. Buffett's approach might be called Buy and Hold and Hold, as he likes to tell his Berkshire Hathaway shareholders, "our favorite holding period is forever." He doesn't mind when a stock takes an occasional tumble because those are good opportunities to buy more shares at a discount.

Rule 5: Know When to Fold Them

Don't get the wrong idea; Buffett does sell stocks when he has to. When the pandemic hit, Berkshire Hathaway sold the entirety of its equity position in the U.S airline industry. The trick for long-term investing success is knowing when to walk away. Buffett learned these lessons as a young man bidding on horse races. He tried to make up for losses by increasing his bets and lost more money. Recognize when a stock is a genuine loser so you can walk away and minimize your losses. If you use an app that allows you to invest your spare change, your portfolio will be adjusted automatically to protect you when a stock is in trouble.

Rule 6: Always Be Willing to Learn New Things

Buffett likes to say that knowledge accumulates just like interest in the bank. He starts each day with a newspaper and reads books on various topics every day. Consuming information will not only influence your investing, but it also will prepare you for success in all areas of life. Soak up what others can tell you about new technologies and new strategies. Those who avoid learning new things risk falling behind and missing out on opportunities.

Continuously expanding your knowledge and skills will not only help you make better investment decisions, but it will also help you adapt to new situations and challenges that arise in your personal and professional life. Learning new things can also give you a competitive edge in your career and improve your overall quality of life.

There are many ways to learn new things, such as reading books, attending conferences and workshops, taking courses and classes, networking with experts in your field, and seeking feedback from mentors or colleagues. It's essential to be open-minded and curious about the world around you, and to approach learning as a lifelong journey rather than a destination.

Buffett once said, "The more you learn, the more you'll earn." By embracing this mindset and continually seeking new knowledge and insights, you can position yourself for success in all aspects of your life.