Here's what Warren Buffett's mentor said about the investment



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Investment via Shutterstock

Even Warren Buffett has a mentor.

Benjamin Graham was an American investor and economist and the author of one of the most famous financial books of all time: The smart investor.

The Oracle of Omaha said about Graham and his famous financial book:

I've adopted an investment philosophy that has not really changed since I've read the book … It's Ben's ideas that have pushed me in the right direction.

Whether you are an entrepreneur, investor or other, Graham's lessons will help you find financial success faster.

Know thyself

"But investing is not about beating others in their game. It's about controlling yourself at your own game." – Benjamin Graham

In the book, Graham proposes the existence of two types of investors: enterprising and defensive.

An enterprising investor is willing to take more risks to grow his resources.

A defensive investor wants to protect what he has at all costs.

The trick is to find out what type of investor you are based on your personality type and your risk ability.

For example, you may be able to tackle marketing, writing, advertising, customer service, product development, etc., but should you?

Overwhelmed by Shutterstock

It is very unlikely that you have the skills to perform all these activities at a high level.

Assuming you understand your strengths and weaknesses, focus on what you excel at or like to do. Then work towards outsourcing or delegation of your means.

Manage your risks

"A successful investment is risk management, not avoidance." – Benjamin Graham

Let's say you decide to invest $ 10,000 of your personal finances into your new business. It is a risky investment decision.

A competitor could offer a version of your product or service more efficient and more affordable, and you go bankrupt.

A change in Google's search algorithm could halve traffic to your website and prospects.

A bored customer may post a negative review about your product or service, thereby deterring other people from buying from you.

It's enough to make you grow some gray hair.

Before investing more time and money into your business, think about how you can manage your risks.

Could you diversify by offering more than one product or service? Would paid search traffic help you manage the risks of relying solely on SEO? When can you use this $ 10,000 and reduce your potential for painful losses?

Money via Shutterstock

Remove the emotion from the equation

"The main problem of the investor – and even his worst enemy – is probably himself." – Benjamin Graham

If you spend the early morning hours and your free time at night and on weekends it is difficult to separate emotions from practical decisions.

However, Graham orders you to be self-disciplined! Find a way to step back from your investments in time and money before making a decision about your business or finances.

Perhaps you could hire a business coach who could help you draw a painful conclusion about a product or service. After all, he is not invested in your ideas or your success.

Or could you schedule five hours a week for customer interviews to understand what they are struggling with, rather than what you want to sell?

Look for a margin of safety

Graham first introduced this investment concept before Warren Buffett intervened to explain it,

You do not try to buy companies worth $ 83 million for $ 80 million. You leave yourself a huge margin. When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks. And this same principle works in the investment.

Your job is to avoid paying too much for any investment in your business, no matter how exciting. Determine what is worth something and the minimum you can pay. This gap gives you more margin to fail if the investment or purchase does not materialize.

For example, spending all your profits in a Facebook advertising campaign that you hope to convert will be an invitation to disaster.

Similarly, expecting a single customer's contract to maintain light is an invitation to sleepless nights. what will you do when they leave?

Rebellions can be built on hope, but not businesses! Instead, consider your ability to fail at the beginning of any new business project.

Smart tip

Although Graham published his book in 1949, he focuses on timeless principles rather than datable tactics.

Just ask Warren Buffett, who built a legacy by applying his mentor's recommendations.

Even if you are not concerned with stocks, stocks and options like Buffett, you can still apply many of Graham's principles to investing and making decisions about your business.

Decisions via Shutterstock

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Investment via Shutterstock

Even Warren Buffett has a mentor.

Benjamin Graham was an American investor and economist and the author of one of the most famous financial books of all time: The smart investor.

The Oracle of Omaha said about Graham and his famous financial book:

I've adopted an investment philosophy that has not really changed since I've read the book … It's Ben's ideas that have pushed me in the right direction.

Whether you are an entrepreneur, investor or other, Graham's lessons will help you find financial success faster.

Know thyself

"But investing is not about beating others in their game. It's about controlling yourself at your own game." – Benjamin Graham

In the book, Graham proposes the existence of two types of investors: enterprising and defensive.

An enterprising investor is willing to take more risks to grow his resources.

A defensive investor wants to protect what he has at all costs.

The trick is to find out what type of investor you are based on your personality type and your risk ability.

For example, you may be able to tackle marketing, writing, advertising, customer service, product development, etc., but should you?

Overwhelmed by Shutterstock

It is very unlikely that you have the skills to perform all these activities at a high level.

Assuming you understand your strengths and weaknesses, focus on what you excel at or like to do. Then work towards outsourcing or delegation of your means.

Manage your risks

"A successful investment is about managing risks, not avoiding them." – Benjamin Graham

Let's say you decide to invest $ 10,000 of your personal finances into your new business. It is a risky investment decision.

A competitor could offer a version of your product or service more efficient and more affordable, and you go bankrupt.

A change in Google's search algorithm could halve traffic to your website and prospects.

A bored customer may post a negative review about your product or service, thereby deterring other people from buying from you.

It's enough to make you grow some gray hair.

Before investing more time and money into your business, think about how you can manage your risks.

Could you diversify by offering more than one product or service? Would paid search traffic help you manage the risks of relying solely on SEO? When can you use this $ 10,000 and reduce your potential for painful losses?

Remove the emotion from the equation

"The main problem of the investor – and even his worst enemy – is probably himself." – Benjamin Graham

If you spend the first hours of the morning and your free time at night and weekends to build a parallel business, it is difficult to separate emotions from practical decisions.

However, Graham orders you to be self-disciplined! Find a way to step back from your investments in time and money before making a decision about your business or finances.

Perhaps you could hire a business coach who could help you draw a painful conclusion about a product or service. After all, he is not invested in your ideas or your success.

Or could you schedule five hours a week for customer interviews to understand what they are struggling with, rather than what you want to sell?

Look for a margin of safety

Graham first introduced this investment concept before Warren Buffett intervened to explain it,

You do not try to buy companies worth $ 83 million for $ 80 million. You leave yourself a huge margin. When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks. And this same principle works in the investment.

Your job is to avoid paying too much for any investment in your business, no matter how exciting. Determine what is worth something and the minimum you can pay. This gap gives you more margin to fail if the investment or purchase does not materialize.

For example, spending all your profits on a Facebook advertising campaign that you hope to convert will be an invitation to disaster.

Similarly, expecting a single customer's contract to maintain light is an invitation to sleepless nights. what will you do when they leave?

Rebellions can be built on hope, but not businesses! Instead, consider your ability to fail at the beginning of any new business project.

Smart tip

Although Graham published his book in 1949, he focuses on timeless principles rather than datable tactics.

Just ask Warren Buffett, who built a legacy by applying his mentor's recommendations.

Even if you are not concerned with stocks, stocks and options like Buffett, you can still apply many of Graham's principles to investing and making decisions about your business.

Decisions via Shutterstock