Header Ads

3 Tips Given by Warren Buffett and Charlie Munger to a 14-year-old Shareholder

Most young people are busy with getting good grades and preparing for university education. Justin Fong was attending Berkshire Hathaway's annual shareholders meeting for the third time at the age of 14 at 2004.

He had a question for Hathaway's CEO Warren Buffet and Buffett's assistant Charlie Munger. The big question was: "One of the books I read is telling me that you love to give advice  to young people on their financial  life and financial considerations, because we have had so many years to follow those recommendations. Can you share a few concepts with us?"

Then Buffett and his assistant Munger then gave the young Fong three tips.

Acquire good habits by now.

Buffett said  that a person should acquire good habits before much of his age, and added: "young people are much more prone to develop good habits that will help them greatly  in their future lives more than us."

"I think people tend to not notice the power of habits in general until they are old", said Buffett. And continued with "It is at least as important to develop correct habits as young as 45 or 50 years olds trying to change themselfs".

Do not borrow.

He is aware of how tempting borrowing is and according to him, even the smallest debt is not worth the effort being spent at all. "Being able to spend more than you can earn is very provocative, and a very understandable desire. But I assure you it is not worth it."

One of the most troubling issues is that people send Buffett their financial problems that they suffer because of debt in letters. Buffett says that they rewrite to each one individually, because these people are beautiful spirited people who just made a mistake. Borrowing money that they cant even think of.

Buffett said, I tell them;" The most beautiful way of escape is to go bankrupt. I think there's no other way to get out of debt. They have to go bankrupt, then start building their financial lives from scratch, and they should never again use credit tools, such as credit cards".

Get good people around you.

Both Munger and Buffet finally give the following advice; "Keep your good friends as close to yourself as possible, and stay away from people who could hurt you."

"Stay away from people who are malicious or seriously irrational, especially if they are attractive members of the opposite sex." said Munger. After blowing up a laugh. Then he said: "This can give you big problems."

"When you choose a partner, make sure that he or she had better habits than you so you will move towards those good habits. Likewise, if you spend time with malicious people, you'll see that you're getting bad habits."

According to Buffett, the first step is to prepare a quick checklist of how you want to spend time with people. Ask yourself these questions; ”What do I look for in people around me?

Buffet finished the conversation by: "You can do it all when you're young. As time goes by, your work will get harder and harder. In fact, what we're saying isn't so complicated."

No comments

Powered by Blogger.