So I found this article from Warren Buffet on 6 things he thinks we should do with our money in 2015. Some of them are very old tips which he has been giving for years…and which most of us already know.
I agree with the majority of them so here are a few of my favorites.
- Learn How to read Financial Statements
This is such a true statement. Everyone should learn to read and understand the statements that surround our financial lives. Whether you get your statements in the mail or only online you should understand what they say and what actions you will need to take, if any.
- Focus on Saving, not Getting Rich Quick
This one should be a no brainer. Many people don’t realize how difficult it can be to simply strike it rich and forget that they need to focus on saving. When you save you can at least harness the power of compound interest and begin to grow your finances that way.
- When Stock Prices drop, Buy don’t Sell
This is the simple strategy of buy low, sell high that is being preached everywhere. Part of the reasoning behind this is the belief that prices are mean-reverting. This means they will go back to hover around a general mean price based on the historical averages. If prices are falling now, it stands to reason that they will go back up in the future to remain around that average price.
I like those three tips the most because they are the simplest to understand and to implement in your daily life.