By JLP | September 9, 2008
My sister-in-law, V, brought 10 Ways to Get Rich – Warren Buffett’s Secrets That Can Work For You to my attention, which was in this week’s Parade. These are some great pointers, but I would hardly call them “secrets.”
1. Reinvest your profits – this is the only way to take advantage of compound growth, which is money growing on money.
2. Be willing to be different – you follow the herd, you’re gonna get hurt. Going against the herd may be scary, but can pay off if done properly.
3. Never suck your thumb – If you find something good, act. Don’t sit around doing nothing.
4. Spell out the deal before you start – Get all the details in writing before you follow through.
5. Watch small expenses – The article mentions a guy who counted 500-sheet rolls of toilet paper to make sure he wasn’t being ripped off. That seems a bit extreme to me but I see the point of not wasting money.
6. Limit what you borrow – I believe that the only acceptable forms of debt are student loans, car loans (reasonable car loans), mortgages, and possible 0% deals that may pop up every once in a while. Now, don’t mistake that sentence to mean that I think it’s okay to have debt—that’s not what I’m saying. The main thing is to use debt as a tool and use it wisely.
7. Be persistent – Always remember the saying: “If at first you don’t succeed, try, try again.”
8. Know when to quit – You have to know when to say, “when.”
9. Assess the risks – Do some worst-case-scenario analysis before you proceed. In other words, count the costs before you begin.
10. Know what success really means – I love the fact that Buffett is not on an ego trip with his giving. According to the article, Buffett does not want any buildings named after him. That’s soooooo cool! I really respect that about him.
Anyway, there’s a quick summary of the article with my thoughts added. You can read the article here.