So much has been written about Warren Buffett. He is a self-made man and a paragon of American success in terms of being born without a silver spoon in his mouth.
Many wealthy people often have a head start on the rest of us by having been born into “old money”. This means that their families are very wealthy and often have been for several generations. They have networks of similarly wealthy friends and family and tend to help each other continue to make more money.
We now have an entire generation of nouveau riche individuals and families who turn the old establishment upside down. Warren Buffett is one of these men.
From what I’ve read about his background, he seems quite naturally prepared for being an investor. It seems he had a natural affinity for math and could add sums in his head rather easily. I know this isn’t my situation. I still count on my fingers sometimes!
Warren Buffets Background
His dad was also a stockbroker which exposed him early on to the stock market, purchasing and selling. I can just imagine what an education he must have had in those early days. He was born in 1930 which meant that his early life was all about the depression. I haven’t read anything so far about how well his dad did during the depression but some people did very well on the stock market by purchasing cheap stock, holding onto it and then selling it once the economy was doing well. I suspect Buffett was exposed to all of this early on because one of the hallmarks of his career was to buy well known, stable company stocks and hold onto them for a long time.
This is so different from so many who play the stock market. They buy low and sell high, but often do not hold onto the stock for very long. For them, I think it is more about the thrill of the chase rather than trying to make money in a stable manner.
There’s a story about one of Buffett’s first investments. He bought the stock low. The stock went lower, and Buffett held on. Then it rose and it sold it for $3 more per share than he purchased it. He was thrilled but then was very disappointed that he didn’t wait because the stock rose to more than $100 per share more than he had purchased it at. If this experience hadn’t happened so early in his career, I wonder how different Buffett’s life would have turned out. He credits this experience with having changed his whole approach to investing. Namely, that he would be patient with his investing instead of selling stocks quickly when they jumped a little in value.
So many of us want to make the quick buck and become an overnight success. It takes time. The only scenarios I know of where people get rich quickly is when they get an inheritance or when they win the lottery. Otherwise, it takes time.
I know I get impatient with how things are working out in my life. Sometimes I want results right away and manage to sabotage myself instead. Slow, steady and with confidence is the best approach. This is the biggest takeaway lesson for me right now. Buffett learned this early on, and I will take his experience and apply it to my life, my business.
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