As long as you regard financial management as a lifelong career, you can continue to grow your wealth even if you encounter setbacks.

Warren Buffett is arguably the most famous and respected investor in history. In addition, the "Stock God" is most praised for his approachable charm and some classic quotes on the art of investment.

Generally speaking, if you want to climb a mountain, it is safest to follow the footsteps of those who have successfully climbed it. If you study and use Buffett's following investment advice, your chances of investing successfully will be greatly increased.

A

Never lose money.

Buffett has one of the most classic investment suggestions: "Rule 1: Never lose money. Rule 2: Never forget Rule 1." If you lose money on an investment, it will be difficult to get it back. , let alone profit.

2

Buy high-value products at low prices

In his 2008 letter to Berkshire Hathaway shareholders, Buffett shared another A key principle: "Price is what you pay, value is what you get." If you pay more than you get in value, you may lose -. For example, you might be paying high interest on your credit card debt or spending money on things you rarely use.

If you really want to succeed, it is better to live a wealthy but not luxurious life like Buffett and focus on looking for opportunities to obtain high value at low prices. Buffett once wrote, "Whether I buy socks or stocks, I like to buy high-quality goods on sale."

Three

Form healthy financial management habits.

In a speech at the University of Florida in 2007, Buffett said, "Most behaviors are habitual, and it is often said that the chains of habit are so light that they are difficult to feel, until they are so heavy that they cannot be broken. "So you need to develop positive financial habits, and breaking them can be damaging to your wallet.

Four

Avoid debt, especially credit card debt

Buffett’s secret to amassing so much wealth is to let interest rates work for him, not like so many Americans Serve interest rates. Buffett pointed out in a speech at the University of Notre Dame in 1991: "I have seen many people fail because of alcohol and leverage. Leverage is borrowing money. In fact, there is not much leverage in the world. If you are smart, you can make a lot without borrowing money. Money.”

Buffett is particularly wary of credit cards. His advice is that it's best to avoid using credit cards altogether. He once said, "The interest rates on credit cards are very high, sometimes reaching 18 or even 20. If I borrow money at an interest rate of 18 to 20, I will go bankrupt."

五

Have cash on hand.

Another key to ensuring financial security is to maintain a certain amount of cash reserves at all times. Buffett said in Berkshire Hathaway's 2014 annual report: "We always maintain at least $20 billion in cash equivalents, and usually much more than that."

Many companies and individuals have Eager to invest all your cash to make money. Buffett said: "Cash is like oxygen to people. You don't feel it when you have it, and you remember it when you don't have it. When paying for a bill, only cash is the legal hard currency. You never take cash with you when you go out."

Six

Invest in yourself

The rewards are huge. "No matter how much you invest in yourself, you get back tenfold." Unlike other assets and investments, "No one can tax it or steal it."

Seven

Understand financial management

Buffett’s famous saying tells us that we must actively learn personal finance. As Buffett's partner Charlie Munger said, "You must be smarter when you go to bed that night than when you wake up."

Eight

Believe in low-cost index funds

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Many of Buffett's famous aphorisms are full of philosophical meaning. In addition, he also gives practical advice that almost everyone can use. For example, Buffett recommends that ordinary investors buy index funds.

In a 2013 letter to shareholders, he recommended: "Use $10 of cash to buy short-term government bonds and $90 of low-cost S&P 500 index funds."

Buffett has stuck to this advice for years. He also said at the 2004 Berkshire Hathaway annual meeting: "If you invest in a low-cost index fund 3354, you don't have to invest all your money at once, but average it over 10 years. Then your investment income will be 90% higher than that of people who invest at the same time as you.”

Nine

Repay social debt

For example, he and Bill Gates. The "Giving Pledge" initiative launched by the Communist Party of China has attracted the participation of more than 100 billionaires, who plan to donate at least half of their wealth to society during their lifetimes. While you may not be a billionaire, you can enrich your life by giving back to the community.

10

Treat financial management as a long-term game.

Warren Buffett once said, "The reason why someone can sit under the shade of a tree is because someone planted a tree a long time ago." If you plant the seeds of financial management now, you can do it later. Enjoy the coolness in life. This shield may include not having to pay off debt, enjoying a comfortable retirement, being able to pay for your children's college tuition, etc.

Building real wealth and financial security takes time. In this process, you may encounter many challenges. As long as you regard financial management as a lifelong career, you can always stay on the right track even if you encounter temporary setbacks. Only in this way can you have a solid and lasting financial foundation.

Translator: Park Sung-kyu Related Questions and Answers: Related Questions and Answers: What kind of philosophy does Buffett use for financial management and investment?

Warren Buffett, who has long criticized the high fees charged by the hedge fund industry, has stepped up his criticism of private equity firms. Because these companies have raised record amounts of original funding in recent years.

At Berkshire’s annual meeting of shareholders on Saturday, Buffett said: “We’ve seen a lot of failures from private equity funds where their returns actually didn’t work out what I think is an honest return. "

He also said that if he were managing a pension fund, he would be very cautious about the funds provided to him.

Buffett has consistently criticized asset managers for charging high management fees and charging performance fees that sometimes do not outperform the market as a whole. The presence of private equity firms looking for leveraged buyout firms has also made it more difficult for Buffett to find big acquisitions for Berkshire in recent years.

He also said his company would never approach private equity funds.

Internal rate of return is a measure of performance for most funds

Buffett and Berkshire Vice Chairman Charles Munger have criticized the performance of some private equity firms. Buffett said that when the company charges management fees, it will include funds stored in short-term Treasury bills waiting to be used, but it is deliberately not included when calculating the so-called internal rate of return.

Qichacha: Buffett's company in Hong Kong

Buffett said: "If you hold U.S. Treasury bonds for a long time, their returns will look better. But in fact they don't look better. That's great."

Munger describes this approach as "telling a little bit to make money." He added that many pension funds are choosing private equity because they don't have to reduce asset values ??as much as they would during an economic downturn. He said it was "a stupid reason to buy."

Buffett has previously criticized the practice of private equity funds taking on debt, saying in a 2014 letter to shareholders that when people want to sell their businesses, Berkshire will provide another, more Permanent buyer. He acknowledged on Saturday that leveraged investments would outperform other investments in good circumstances, but pointed to the 1998 collapse of hedge fund Long-Term Capital Management as an example of this downward trend.

While some believe Berkshire has built in leverage by using cash flow from its insurance business to make acquisitions, Buffett said he would not add debt in pursuit of deals.

"The covenants to protect bondholders have really deteriorated," Buffett said. "I'm not excited about so-called alternative investments."

The scale of his fund is in the trillions Short selling, loves stock repurchase operations

Buffett's Berkshire Foundation, which has more than $114 billion in cash reserves, purchased more of its own shares in the first quarter.

The Omaha, Neb.-based conglomerate bought back $1.7 billion worth of stock, and its stock price fell in the first quarter. That's more than the $1.3 billion Berkshire spent last year after relaxing its buyback policy. Berkshire has historically tended to use cash for stock acquisitions.

Buffett has been preparing for the possibility of more stock buybacks, having largely avoided repurchasing shares during his more than 60-year career. As Berkshire grew into a behemoth with a market capitalization of $739 billion, the billionaire investor found it difficult to find attractive deals that would propel the company forward.

The older Buffett gets, the more cautious he becomes

Buffett said at the company's annual meeting that based on the current stock price, "We think we can buy it, but we are not paranoid about buying it." "If Buffett thinks a stock is selling for 25 or 30 cents less than it's actually worth, he's going to spend a lot of money buying it.

Cash returns and U.S. Treasuries climbed in the first quarter, even with buybacks, thanks to the health of the U.S. economy and Berkshire's vast network of manufacturing and service companies generating more profits. 2, reaching $114.2 billion.

While excess cash is a problem, it also hampers Buffett's efforts to outperform the market. Berkshire stock's total return has lagged the S&P 500 over the past decade.

The growing cash pile could raise questions about Buffett's trading prospects at shareholder meetings. At the annual event in Omaha, Nebraska, the billionaire spent hours fielding questions from investors on everything from corporate strategy and succession to politics and life lessons.

In response to the first question at the meeting, Buffett said that the size of the company's cash reserves would not change his approach to stock repurchases.

Buffett said: "When we think the intrinsic value of the company is lower than the conservative estimate, we will buy it. Now the intrinsic value is not a specific point, it may be a range in my mind, There may be a range of 10."

Buffett showed this week that he can still find unique opportunities.

With the help of Bank of America, Berkshire agreed to invest $10 billion in Occidental Petroleum. The deal, which hinges on Occidental Petroleum Corp. winning its battle to acquire Anadarko Petroleum Corp., would provide Berkshire with preferred stock and warrants.

Beyond its own stock, Berkshire was a net seller of stocks in the first quarter, with sales and redemptions totaling $2.06 billion, compared with purchases totaling $1.53 billion.

The value of the company's stake in Apple climbed to $48.5 billion, and the tech giant's stock price rose 20 percent in the first quarter.

Apple is one of the few technology companies that Buffett has invested in.

Operating profit increased by 5% to $5.56 billion in the quarter, benefiting from its railway, energy, manufacturing and retail Business income. Harshly affected by severe winter weather and flooding, the railway company's revenue still rose 9.4%, partly due to higher car prices.

While Berkshire's insurance business reported better investment performance, underwriting income fell 4.4%. This was driven by net losses in the reinsurance business, which were driven by higher provisional liabilities and Berkshire's collapse.

In the post-Buffett era, no one will take over?

Berkshire’s annual shareholder meeting often raises questions about the challenges of replacing CEO Buffett.

This year, investors are seeing potential candidates.

When asked about succession, Buffett pointed out that his deputies Greg Abel and Ajit Jain were present and available to answer questions. The two ended up answering many questions about energy investing and insurance.

The 88-year-old Buffett and the 95-year-old Vice Chairman Charlie Munger still occupied the vast majority of the speaking time in more than 5 hours of questions and answers, and neither of them showed any desire to speak. To withdraw from the role they play in this massive conglomerate.

But the deputies’ appearances gave shareholders some insight into the two executives who over the last year directly oversaw the company’s key operating units.

Buffett told shareholders: "The truth is, Charlie and I are both afraid of looking bad, and those guys are better than us. They know the business better, and they have worked harder so far at this meeting." You can definitely ask them questions." Buffett and Munger often answer questions about their core philosophies on investing and managing companies, while Abel and Jain provide some more practical details. Abell, 56, laid out the timeline for the company's clean energy plans and the company's competitiveness in Iowa, while Jain, 67, gushed about Berkshire's progress with archrival Progressive Corp. Comparison on profit indicators.

Abel runs all of Berkshire’s non-insurance businesses and is seen as a more likely successor to the CEO because of his younger age and broader responsibilities. Buffett has said many times that Jain may have made more money for shareholders than he did for himself.

Buffett said Saturday that investment deputies Ted Weschler and Todd Combs would not answer questions because he did not want them to reveal any secrets. Interestingly, one shareholder asked the two a question, and Buffett answered instead.

Zhikejun believes that Buffett can work until he is 100 years old. What do you think?