1. On Earning: “Never depend on single income. Make investment to create a second source”.
That is what my grandmother always telling me because having only single income is not only dangerous but also a slow way of accumulating wealth. As one of the definition on risk – “Risk is having only one single income”. For we do not know what the future holds, if it happens that our source of income is in danger or lost, it would be very hard to find another source.
2. On Spending: “If you buy things you do not need, soon you will have to sell things you need”.
Discipline is always the key. Do not buy things you do not need. In riding a plane, what is the difference between the business class and economy class? Do you really have to spend so much for that difference? Do you really have to buy branded clothes just to look good? Are the things you are planning to buy necessary? Again, live simple. It is not bad to buy expensive things as long as it has its use.
3. On Savings: “Do not save what is left after spending, but spend what is left after saving”.
This concerns about how you budget your money. Put your savings first before any expenses.
The bad formula: income – expenses = savings
The good formula: income – savings = expenses
Most people save only after what is left at the end of the month. Savings should be part of your budget, not a left over.
4. On Taking Risk: “Never test the depth of the river with both the feet”.
Do not use all of your resources in gambling on a certain investment or else you’ll lose everything. Only a considerable portion of your resources should be put on a gamble. By saying considerable portion, I mean the amount of money you are willing to take the risk of losing.
5. On Investment: “Do not put all eggs in one basket”.
Have your portfolio diversified. Putting it in one type of investment is risky.
6. On Expectations: “Honesty is a very expensive gift. Do not expect it from cheap people.
Do not expect too much from a simple thing. Make reasonable expectation because sometimes it may frustrate you if the returns are too much low from what you have expected.
Quotes are nuggets of wisdom from people who made it through their lives. All of it, we should apply in our lives too and share to others.
– Good, Famous, Nice, Excellent Quotes by Warren Buffett