Warren Buffetts top 5 investment tips to become rich fast
Warren Buffetts top 5 investment tips to become rich fast
Warren Buffett, popularly known as the 'Oracle of Omaha', is one of the richest and most-trusted investors in the world. The CEO of Berkshire Hathaway is a value investor at heart but shares a lot of insights during shareholder meetings, interviews, public gatherings and in his annual letter to shareholders.
There are number of tips and teachings shared by him, which are considered as the bible for investors, throughout the world. Here are the top 5 investing tips Warren Buffett has given:
1. Buy and hold your investments:
"If you aren't willing to own a stock for 10 years, don't even think about owning it for ten minutes," said Buffett in one of his interviews. This strategy is the most easy tip for investors to turn their investments into huge stock of money. But sadly, people tend to remain impatient when investing. Warren Buffett believes that an investor should buy and hold on to his/her investments to earn the most.
2. Cash is important:
Warren Buffett believes that an investor should possess adequate cash and liquid with himself for emergencies and contingencies. Emergency or urgent requirement never ask before coming, therefore an investor should keep a good amount of liquid available to tackle these situations. Buffett is one of the richest investors in the world, but he suggests not to invest each penny of your hard earned money in markets.
3. Be fearful when others are greedy:
This is one of the most famous lines, which he has shared at number of occasions. Buffett says, "When others are greedy, I remain fearful and when others remain fearful, I turn greedy." Which means, that an investor should never follow or listen others while investing. An individual should have enough faith in himself for any decision he takes. Walking out of crowd helps you establish a different image in the market, therefore when others are investing, you pull off and do vice or versa.
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4. Buy undervalued shares:
Buffett says that an investor should prefer buying undervalued stocks. The undervalued shares are those stocks which possess huge capacity to return high on investments but remain outside the portfolios of people. Undervalued stocks could be those companies which are doing great business and has been there in the segment or market for years. The investor should ideally perform a proper research before picking these companies and invest in fixed patterns.
5. Dividend payout should be high:
The dividends are healthy, according to Warren Buffett. He believes that a good company should have a brilliant dividend payout ratio. The company that pays good dividends to its shareholders should be a preferable buy. If a company is paying out regular or growing dividends each year, it covers the volatility risk of the equity investment. Dividends are the part of profits of the company which are distributed annually, half yearly or quarterly to shareholders.
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