4 key rules that can help you achieve financial success
World-class investor with a net worth of 128.1 billion US dollars or more than IDR 2,000 trillion, Warren Buffett has shared four key rules that can help anyone achieve financial success.
Buffett, who began his business journey in high school in 1945, is known as a source of inspiration for investors and businessmen around the world.
under Warren Buffett’s leadership of Berkshire Hathaway in buying stocks that have good businesses, but with undervalued stock prices. This trick has proven successful and reflects Warren Buffett’s famous value investing philosophy and strengthens Berkshire Hathaway’s position as an iconic American conglomerate.
His success in pursuing a career and running a company is not an easy thing, but it is the awareness of principles that organize the success. The principles he built became rules that have always been applied consistently for decades and have become important again in the midst of economic difficulties.
Warren Buffett’s advice is not only useful for those who want to become billionaires, but also for anyone who wants to achieve financial security, whether to retire as a millionaire, build wealth over the course of a career, or simply achieve a general sense of success.
The following are four important rules from Warren Buffett that can be applied by anyone in various situations as quoted from Express.co.uk.
- Prioritize Saving First
Statistically, the most financially secure people are those who regularly practice financial discipline. Everything must be considered for retirement and learn to save first, then meet your needs.
Enjoying luxury and high-risk investments is only used with the smallest funds from your income. The important thing to pay attention to is practicing and teaching financial discipline and saving consistently and from an early age to children.
- Consider Purchasing Branded Items
If purchasing a high-priced luxury product, choose something that allows for easy resale or permanent or part-time rental for additional income and tax benefits.
When purchasing a high-value product, always think of it as an investment product so that the product continues to hold value.
- Minimize borrowing on credit cards
Credit cards can be a waste of income and savings with the greatest potential. Buffet always recommends cash transactions.
If you use a card, learn a system that can optimize usage to keep your credit score high and remain eligible for a credit line when needed while paying a minimum amount of interest.
- Be careful when investing with borrowed money
Borrowed money is not recommended for investment. Even though there are institutions that provide loans with safe guarantees for investing, this is not necessarily safe in the future. So be careful when investing using borrowed money.
The big risk is that investment shares are used as collateral for the loan and when the value of the collateral falls due to a market crash, the borrower will face what is known as a margin call forcing them to sell the shares. This causes prices to be lower.
