If you are reading this, then you probably are familiar with Warren Buffett. But, if you are new to the investing world, then he might not be completely recognizable to you.
So who is Warren Buffett?
He is a self-made billionaire investor, philanthropist, and CEO of Berkshire Hathaway. He is also one of the most successful investors of all time and also has promised to give away 99% of his fortune.
He’s highly regarded in the investing community and has supplied the world with some amazing knowledge. Which is why I wanted to put this post together.
Simple, Yet Brilliant Warren Buffett Quotes
I don’t know about you, but I enjoy “nerding out ” on quotes from other people. Maybe it’s advice from well-known people, historians, business tycoons, or celebrities.
And when it comes to investing, money, and life — Warren Buffett has the goods.
Below are some of the best Warren Buffett quotes (and my favorites) along with how you can apply them to your own personal finances and life in-general.
You might have even more takeaways than me or maybe you just want some quotes to keep by your desk. Either way, I hope you find value below.
If you want more info about Warren Buffett, you can read his full bio here.
“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”
This Warren Buffett quote always makes me laugh, mostly because of its simplicity and the cheeky tone.
But, still holds incredible truth to the investing world.
The stock market will have ups and downs, but it’s important to not play into the emotional rollercoaster. It’s a good way to lose money and affect your investing.
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Buffett is a long-term investor and not a fan of timing the market or playing games. Instead, focus on buying investments that you are comfortable holding for quite a long-time.
This is something I’ve practiced with my own investments. If I’m on the fence, don’t understand something, or wouldn’t trust holding on — then it’s not worth investing in it at this time.
Every new investor should re-read this quote and ensure it sticks in your mind.
“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
I find this to be one of my favorites and entirely accurate. While complexity and making things look super in-depth can appear intelligent, sometimes simplicity yields better results.
This is 100% accurate with investing.
Many times, people think that investing is complex or that you have to have an insane amount of funds, stocks, bonds, etc. to have a great portfolio.
Yet, plenty of research and investors have shown that simple diversification are much better choices. I have four index funds in my Roth IRA and that’s it. Easy to manage, diversified, and delivers results.
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”
When it comes to new investors, whether to the stock market or other assets, this Warren Buffett is one to live by.
A big misconception about those who work with investments or that in order to succeed is you have to be an expert. Of course, being smart with your money is important, but it’s when you can master your emotions that investing success will happen.
Letting media headlines, friends or family, or making decisions based on what the market is doing will cause you headaches. With investing, you must remain calm during any stock market storms and avoid being a follower.
“If returns are going to be 7 or 8 percent and you’re paying 1 percent for fees, that makes an enormous difference in how much money you’re going to have in retirement.”
When I was first learning about investing, it was amazing to see what 1-2% fees could do to your investments. At first, it doesn’t seem like much but over years of compound interest you’d be shocked!
The best move you can make with investing, is to eliminate as much of the fees as possible. It’s one reason I’ve stuck with Vanguard and low-cost index funds for all these years.
“The years ahead will occasionally deliver major market declines — even panics — that will affect virtually all stocks. No one can tell you when these traumas will occur.”
The stock market can be a roller coaster ride. There will be corrections and there will be bear markets, it’s a natural part of investing. Yet, it’s also impossible to know when these will happen and for how long.
Sure, there is some technical analysis and some people potentially could get estimations correct, but trying to time the market will cost you.
The media will certainly make you believe that they know when these things will happen. But repeating and saying something will happen all the time, of course they eventually will be right.
What you can do is be prepared, stay diversified, and keep investing consistently if you have years to go before retirement.
“If you like spending six to eight hours per week working on investments, do it. If you don’t, then dollar-cost average into index funds.”
I think another misconception is that investing takes a lot of time to do. And in Warren Buffet’s quote here, that’s okay if you do like spending time on it.
But, you don’t have to either.
You can simplify your stock investing with the 3 Fund Portfolio. Then, you consistently invest every month/week or whatever cadence you want — no matter if the market is up or down. This is dollar-cost averaging.
This is also the strategy I took, except my portfolio for retirement has 4 funds. But I consistently invest in it until it is maxed out (I have a Roth IRA).
“One can best prepare themselves for the economic future by investing in your own education. If you study hard and learn at a young age, you will be in the best circumstances to secure your future.”
I love this quote and is exactly how I taught myself personal finances and investing. If you have the right mindset and dedicate time to learn, you’ll be amazed how much it influences your future wealth.
While the younger you are the better, it’s never too late to start learning and making improvements. The reason it’s best to start early is so you can make some money mistakes and use time to compound your investments.
Before 2014, I knew almost nothing about investing and the stock market. After reading books and teaching myself, I now self-manage everything.
And learning is never over, I’m still reading new books and re-read past ones too. Simply, dedicate an hour or two a week and you’ll start to see results.
“Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick, no.”
While there is plenty of good things in the investing industry, there is also the shady activity as well. False promises of massive returns, get rich in a few days, this company will be the next Amazon, etc.
If you read these kind of articles or emails, ignore and move on. No one can promise you these items and no one exactly knows the future for particular investments.
Additionally, take your time with your investments and keep it simple. Investing should be boring, otherwise the adrenaline you are seeking is more of gambling than anything.
“If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.”
This one should really make you think. Plus, I think it is 100% accurate. Your self-worth and value in life, is not based on how much money you have.
In the end, people do not form a positive opinion of you just because you have your personal finances in order and a high net worth. People remember the type of person you were, what you did for others, and how genuine you were.
Money isn’t everything in life. So while it’s great to be an investor and work on earning more money, you want people to genuinely feel positive about you.
“Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”
Has someone every told you that investing is bad? Or that you might be putting yourself at extreme risk? It happens more than you think and something I did experience in the early days as I got started.
Stock market is intimidating at first and media headlines play into the emotions of the economy as well. So it’s understandable that some people will feel safe with cash.
But as Warren Buffett says here, you are holding onto a depcriating asset due to inflation.
Additionally, your money is not making you money. That’s where investing becomes so critical as it helps you reach your financial goals much sooner than just collecting cash and doing nothing with it.
“If you buy things you do not need, soon you will have to sell things you need.”
You know, instant gratification and lifestyle creep. Two things that can make you spend money where it may provide temporary happiness, but provide no true long-term value.
I take this quote as a simple warning that buying things you truly do not need, cost you in other ways that otherwise, could be financially beneficial to you and your family.
Now, there is nothing wrong with spending money, if you are taking care of your core personal finances and have a plan in place to keep it in control. I’ve never felt you should just hoard money and never experience things.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
Out of all these Warren Buffett quotes, this one always made me think beyond just money or investing. But, I also believe he has a valid point in this particular quote.
I noticed my interest, knowledge, and mindset shifted greatly once I surrounded myself with friends and colleagues who knew way more than I did. This was in the sense of career, business, entrepreneurship, personal finances, and investing.
But as I became part of these groups, chatted about these topics, and asked questions, my behaviors changed overtime. I think it is a key part to your own personal development.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
I read various versions of this Warren Buffett quote in a few books and investing articles. But this is such crucial advice when it comes to your own investment strategy.
When everyone is worried, claiming a bear market is coming, or the markets are down, many people panic. They start selling or making emotional rash decisions.
But this is the time to remain calm and be ready to buy things on discount! And when people are loving the markets, buying on new highs, and people who never invested are talking about investing, you want to be way more cautious.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
As Warren Buffett has been quoted before, the younger you get started the better off you’ll be. While learning about investing might not be fun for you, if you just start, you’ll be stress free later in life.
Many people will put things off or will worry about it later.
But when later comes, you realize the mistakes you made by waiting. Sure you can play catch up, but it’s much more difficult or can create a world of anxiety as you get older.