Warren Buffett: 2 Biggest Money Mistakes People Make

Warren Buffett: 2 Biggest Money Mistakes People Make


As perhaps the most successful and famous investor of our time, Mr. Warren Buffett should know a thing or two about money management. When he took over the management of Berkshire Hathaway in 1964 until today, the company has an average growth rate of about 18% per annum. $1,000 invested in 1964 will be worth a staggering $6.4Million today! In comparison, the same amount if invested in an S&P index fund would have grown to about $60,000 in the same period. This speaks volumes about his genius in financial management.

Let’s face it. A lot of us have a very hard time reaching our financial goals and it usually got nothing to do with bad luck. According to Mr Buffet, one of the richest men in the world, there are two simple and costly mistakes most of us make when managing our personal finances.

The first mistake:

We neglect to cultivate the habit of saving money early in life. Yes, saving is a habit that must be cultivated in most of us; it comes naturally to only a few people.  But too often, we allow ourselves to fall into the trap of believing that saving can wait until we have more money to spare. This turns out to be a costly mistake as we approach middle age.

My earlier article on “How to do less and have more for retirement” illustrates this point poignantly.

The second mistake:

The second mistake that people make is trying to get rich quickly. One should understand that when it comes to building a fortune, there is really no shortcut to success. The key to wealth accumulation, according to Mr Buffett, is patience. It is usually ‘time in the market’ and not ‘timing of the market’ that creates success in investment. Many people are told that the stock market is useful only so long as you can find the next big company that will double your money in a matter of days and that the best investments are the ones that no one knows about. This is the undoing of most people who want to get rich quick in the stock market. Greed and impatience are the root causes in the failure of money management.

As Mr Buffett says, “It’s pretty easy to get well-to-do slowly, but it’s not easy to get rich quick.” Many financial instruments that promises too-good-to-be-true returns are usually what they are: too good to be true. Wise words indeed from the man who has said his favourite holding period for his stocks are “forever”, contrary to traders who can buy and sell their stock ‘investments’ in less than a day.


Insure yourself, protect others.


2017 HD Logo

Sign up for a Free account at www.InsuranceGuru.com.sg to get more useful insurance knowledge and request for a free life insurance quote now!


Disclaimer: All information, commentary and statements of opinion contained in this publication are for general information purposes only. They are not intended to be personalized financial or investment advice as they do not take into account your individual circumstances. You are advised to speak to a qualified financial consultant before making any financial decision. This publication should also not be construed as an offer or solicitation to purchase or sell any insurance or non-insurance products including any that may be mentioned here. Whilst we have taken all reasonable efforts to ensure that the material contained in this publication is accurate and informative, InsuranceGuru.com.sg and the author of this article do not warrant or guarantee its accuracy, reliability or completeness. InsuranceGuru.com.sg, its employees, parent, related companies, agents and the author of this article will not be liable for any direct, indirect, incidental or any other type of loss or injury resulting from your use of this content.

Copyright © 2017 InsuranceGuru.com.sg All rights reserved. No part of this publication may be reproduced, stored, transmitted in any form of by any means without InsuranceGuru.com.sg’s prior written consent.

If you are seeing this article sent through your email from InsuranceGuru.com.sg, it is because you had subscribed for it at some point in the past. If you do not wish to receive such emails in the future, you can unsubscribe by clicking here to submit your request. Thank you.


profile picThe author of this article is Mr Sean Ong. He is a Certified Life Coach and a Chartered Financial Consultant with more than 14 years of experience in the finance industry. A shareholder with the one of the largest independently-owned financial advisory company in Singapore, Sean also leads a top financial advisory group and has been featured on the local TV and radio. In his efforts to contribute to the society, Sean ran 1,000km over 87 days to successfully raise more than $13,000 for a children charity in Year 2012. He also published a book called “Mend Your Socks!” where sales proceeds were donated to charity. Sean can be contacted at oneprofessionaladviser@gmail.com.

Close Menu