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Showing posts from October, 2009

my favorite warren buffett quotes

As an investor, I look up to Warren Buffett and value his insights. For those who don't know him, he is an american investor and businessman, the CEO of Berkshire Hathaway. He is also the 2nd richest person in the world, with a net worth of $37 billion. Here are my favorite quotes from the Oracle of Omaha:

1. I always knew I was going to be rich. I don’t think I ever doubted it for a minute.
2. I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
3. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.
4. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
5. Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.
6. Of the billionaires I have known, money just brings out the basic traits in them. If they were jerk…

The 5 investment pillars

A good investor limits his exposure to risk by diversifying in investments. It is like placing you money on a table with 5 legs. If in case a leg gets damaged, the table won't fall because it stands on the remaining four legs. You can even diversify further from each main investment pillar. Its like having pegs on each of the 5 legs making your investment portfolio truly dependable to whether any financial storm. You need not invest in all 5 immediately, work through each of them slowly using a determined savings plan (10% or more if you are comfortable)and before you know it, you have an enviable investment house resting on the 5 pillars.

1. Paper investments
This would include investments in mutual funds, unit investment trust funds, stocks, bonds, money market funds, treasury bills, certificates of deposit and more. These are called paper investments because well, you have a piece of paper or document as proof of your investment. These are offered by banks, asset management co…

a financial mistake most business owners make

What could offer the biggest potential returns of your investment? A profitable business. It can turn P1000 into millions but it can also turn into 000. Putting some money into a business is a must for any investor. Aside from the possibility of raking in profits, having a business actually helps you understand investments better. To quote Warren Buffett, "I am a better investor because I am a businessman and a better businessman because I am an investor". When it comes to learning about finance, running a business is the best teacher. We also need to apply investing principles in our business and what I would like to emphasize is the concept of diversification. A financial mistake most business owners make is the lack of diversification. This is especially true to small business owners. Let us illustrate with the typical lechon manok business. A young entrepreneur decides to start a lechon manok stall. He has great tasting chicken, has good location and people buy it. Needl…

Investing in your own home

Having a place you can call your own is one of life's great accomplishments. It is also one of the best investments you could have and for most people, their largest investment. Whether its a condo, townhouse or a single family house, possessing our own shelter should be an investor's primary investment goal. There are so many reasons why we need to aim for this. First, rent money is dead money. You pay the landlord and poof, money is gone. Whereas mortgage payments increase the equity in your property, thereby increasing the value of your investment. Next, there is a powerful psychological boost that comes with being a homeowner and this will radiate in your workplace, in your business and your life in general. Real estate prices go up in value over time. My parents invested P200,000 for a 3 bedroom house 20 years ago. A family friend recently offered 3 million pesos for it. Doubling your money every 5 years is not a bad investment, isn't it? What is very good about inves…