7 quotes from the world’s greatest financial minds and how you can apply them in real life
1. “Price is what you pay. Value is what you get.” — Warren Buffett, billionaire investor, business magnate, speaker, and philanthropist
The billionaire wrote this advice in a letter to the shareholders of Berkshire Hathaway a decade ago. But even now, it still holds true and will still hold true, in the future.
Price is different from value. You can buy an item in a department store and find the same item, only cheaper, in Divisoria. The value or the quality of the item is the same but the price varies. The same goes with investment options. Do your homework. Research. Look into the companies you’re investing in—their assets, their services, their strategy. Beware of “trends,” sudden increase, or short-term changes in price. Always go for solid, quality investments.
2. "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen, author of bestselling finance and investment books
While it is important to have for financial emergencies, you should not stop at just a savings account. Bank interests are low. You will not be able to compete with inflation and it will hurt you, financially. Spread your money and invest in stocks, funds, insurance, and real estate. It does not have to be big. Start small but be consistent. Invest in your education, too, or, if you have a killer idea, invest in a business.
3. “Stock market goes up or down, and you can't adjust your portfolio based on the whims of the market. So you have to have a strategy and a position and stay true to that strategy and not pay attention to noise that could surround any particular investment.” — John Paulson, billionaire investor, hedge fund manager, and philanthropist
Remember that the market is cyclical. Sometimes it’s up, sometimes it’s down. Stay the course and hold the fort. Invest regularly, whether the market is bull or bear. Invest for the long-term in solid companies that you believe in. You will not only take advantage of cost averaging but will also benefit from long-term gains.
4. “There’s a company behind every stock and there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. This is one of the keys to successful investing: Focus on the companies, not on the stocks.” ― Peter Lynch, American investor, mutual fund manager, and philanthropist
His more famous quote, “Invest in what you know,” also applies but here Lynch breaks it down more specifically. While it is good to look at stock movements, it is more important to make a thorough study of companies you’re investing in. Go for consistent performers with good business strategy, great products, and future prospects and capacity for expansion. That is the only way you can determine whether you’re making the right investment decision or not.
'Don’t stop at just a savings account. Bank interests are low.
You will not be able to compete with inflation and it will hurt you, financially.
Spread your money and invest.'
5. “The intelligent investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham, investor, economist, and professor
Just because the market is down does not mean, it’s time to sell. On the contrary, the wisest and more experienced investors will invest more. Buying a good, solid investment product at a cheaper price when the market is down means earning more when the market eventually recovers. And it will.
6. “History provides a crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.” — Shelby M.C. Davis, founder of investment management firm Davis Selected Advisers, Princeton University trustee, philanthropist
Say it with me, “The market will recover.” If you’ve done your research and invested in solid companies that are consistent performers, then you have nothing to panic about. The funds you’ve invested in will recover. The stock you bought will increase. Selling now or cashing in when the market is down will only make you lose more money. Sit still and wait. Like Davis said, market downturn are inevitable but they are not insurmountable.
7. “To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game.” — Robert Kiyosaki, author of Rich Dad, Poor Dad
Building a successful business or even just an investment portfolio is not always a walk in the park. You’ll lose some, you’ll win some. The important thing is to learn your lesson, turn your losses into gains, and focus on reaching your goal. More importantly, do it. Start investing now. Nothing is ever gained when you do not try at all.