Warren Buffett isn’t just a big name in the world of investing – he’s a legend. With a net worth of 145 billion dollars, people are all ears when he talks about business or financial matters.
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From picking up small companies so you don’t sweat when your stock drops, here’s Buffett’s advice for investing $10,000 if you want to get rich.
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First and foremost, Buffett recommends starting early when it comes to investing to take advantage of the power of compound interest. He describes the power of compound interest as building a small snowball and rolling it down a very high hill. As the snowball rolls down the hill, it collects more snow until it becomes a large snowball.
At the annual meeting of shareholders, when someone asked him how to make billions of dollars, Buffett said, “The trick is to have the highest hill, which means start young or live…old.”
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Buffett recommends investing in small companies. Big investors – like Buffett – and money tend to focus on big companies, which means that small businesses will have less competition, allowing someone with $10,000 to find some hidden gems.
However, Buffett said the only way to grow your money is to buy into good businesses by buying their shares – aka stocks – at attractive prices.
Buffett said that if he had $10 to invest after graduating from high school, he would start by looking at companies with names that start with “A” and then work his way down, looking at smaller companies to find what he wanted. invest in.
“If you’re going to do stupid things because your stock goes down, you shouldn’t own any stock at all,” Buffett said in an interview with CNBC. The downside, he explained, is selling your stock because the price is going down.
Buffett said it’s inevitable that your stock will go down at some point, so why worry about it. “What is needed is to buy something you want, at the price you want, and hold it for 20 years,” he said.
Buffett said you shouldn’t look at your stocks every day. “If you bought a farm or an apartment house, you wouldn’t get a coat on it every day or every week or every month,” he said. “So it’s a big mistake to think of stocks as something that goes up and down and that you have to pay attention to those bobs up and down.”