5 pieces of financial advice from Warren Buffett

“I will tell you how to become rich. Be fearful when others are greedy. Be greedy when others are fearful.” Most people chase what’s hot. As euphoria builds money pours in. Until it collapses. Buffett does exactly the opposite. He buys when most people are selling. And waits when most are buying. Incredibly difficult to do. And incredibly rewarding.

“Price is what you pay. Value is what you get. I like buying quality merchandise when it’s marked down.” Most people chase price. The higher the price the more money flows in. Until the value can’t sustain the price. Buffett chases value. Looks for investments priced under their worth. Then buys and waits for others to discover their value.

“I don’t look to jump over seven foot bars. I look for one foot bars I can step over.” Most people try to hit home-runs. They speculate on the next big hit. And keep striking out. Buffett instead invests to build wealth steadily. Rare home-runs. Lots of singles that win games.

“Successful investing takes time, discipline and patience.” Most people want to get rich quick. So they continually take long bets that frequently blow up. Buffett takes a long term view. He’s happy to build wealth over a lifetime rather than a year or decade.

“What we learn from history is that most people don’t learn from history.” Most people whether euphoric or depressed refuse to learn from those who were successful. And they pay the price. Buffett always learned from others. And reaped the rewards.

-- Doug Armey via Quora