Warren Buffett’s 10 Ways to Get Rich

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.

28 thoughts on “Warren Buffett’s 10 Ways to Get Rich”

  1. Since December 5, 2007, Berkshire Hathaway has been lagging SPX. As of today, it is beaten by SPX with a 2 percentage margin. It’s investment in WFC, WB, AIG has been dwindling, dwindling and dwindling …
    It’s funny that old man still gets heck luv misguided respect ๐Ÿ™‚

  2. I would say most of those 10 ways can be considered common sense; though from time to time that’s a rare thing rather than the common one. I really like the understated tone of the list, the suggestions apply just as easily for a person living on minimum wage as one making billions.

  3. I read that article too – I especially liked the story about how he got started making money. By selling packs of gum, then Coca-Cola, and so on. And good on his parents not to punish him when the cops stopped him for selling used golf balls.

  4. There’s a lot more on Buffett and his methods in his best biography to date by Roger Lowenstein. His auto-biography will come out in 2 weeks – it’s already one of the most popular books on amazon, and it’ll be priceless for everybody interested in PF or investing. ๐Ÿ™‚

  5. I have to agree with what Tom Hanna said. I believe that business loans are indeed acceptable. Taking reasonable amounts of risk and using leverage responsibly is key to making great returns. It will be hard to become rich only using the money you yourself have unless you are rich to begin with ๐Ÿ˜€

  6. My advice is to take Warren Buffett’s advice. Since I started reading great business books and advice from successful entrepreneurs I’ve been able to quit my engineering job and run my own business full-time and I love it. Of course I’m also on the 10-year student loan repayment plan like many people…

  7. I have always strive hard to implement Warren Buffett’s advice. And his annual letter to shareholders is one of the most eagerly anticipated reading for me.

  8. I have always strive hard to implement Warren Buffett’s advice. And his annual letter to shareholders is one of the most eagerly anticipated reading for me.

  9. do you really think those rich would really tell you how they get their money? All crimes they have committed just to fuel their wealth and greed.

  10. Agreed, Terry, I’m 29 and if I am able to continue to make my student loan payments, they will be payed off when I’m 52 and I will have paid almost double the principal balance.

    I am trying to add a bit extra to decrease that time, but it isn’t easy with my other bills.

  11. We spoke at the site myinvestorsplace.com that maybe Warren Buffett was getting in too early with his purchases of GE and GS… what do you think??? IS he still making money??

  12. Of course, I know that we have to be persistent if we want to get rich. But knowing you are not happy with what you are doing, you can’t get rich. Interests and enthusiasm must be included in your list.

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