The Oracle of Omaha Speaks – Listen to Warren Buffett’s 6 Tips for Success.

When the Oracle of Omaha speaks, you must listen.

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Warren Buffett is widely regarded as one of the greatest investors of all time. The most incredible thing about Warren Buffett is that his success has lasted for decades. By being true to his great principles of life, Warren Buffett has been able to become one of the richest men in the world.

What has made the difference for Warren Buffett is patience.

Throughout his career, Warren Buffett has always been able to take the long view. This has allowed him to differentiate himself from the majority of investors who simply take a short-term view. In fact, when the Oracle of Omaha speaks, everyone listens.

He is a well of wisdom in areas far beyond the world of finance. In what follows, I propose to go back over 6 pieces of advice that Warren Buffett gives to those who want to be successful in their lifetime. As always, nothing extraordinary, but common sense is too often neglected by people.

On Earning - Never depends on a single income.

Warren Buffett frequently says that you should never depend on a single source of income. Therefore, you should look early in your life to make investments that will allow you to create a second source of income. This will give you more stability by preventing the disappearance of your first source of income from causing your bankruptcy.

It is up to you to choose the investments you want to make to create other sources of income.

You can invest in the financial markets like Warren Buffett or the world of startups. You can also create systems that generate money while you sleep. This is another great piece of advice from Warren Buffett, and it is what will keep you from having to work until you die.

On Spending - Never buy things you do not need.

We live in a monetary and financial system designed to make you spend more and more money. The possibility given to the central banks to print more and more money out of thin air seriously harms your purchasing power, which is constantly falling over time.

You are therefore pushed to consume more and more to avoid that your money loses all its value.

The consumer society then pushes you to buy things you don't need. For Warren Buffett, it is dangerous to give in to this consumer society:

“If you buy things you do not need, soon you’ll have to sell things you need.”

By buying things you don't need, you risk having to sell things you really need. So Warren Buffett recommends that you always think before you buy something. This will help you make better choices in managing your personal finances.

On Savings - Spend what is left after saving.

A golden rule of personal finance is to always pay yourself first. No matter what happens, you must pay yourself first. Unfortunately, too many people do the opposite, which led Warren Buffett to once offer the following advice:

“Do not save what is left after spending, but spend what is left after saving.”

Too many people will spend first and then see what can be saved with what is left. These people will always be one step behind those who save first and then use what's left to spend.

This is the right approach to using the money for your life.

On Investing - Do not put all eggs in one basket. Diversify.

This advice from Warren Buffett is interesting. On the one hand, he says not to put all your eggs in one basket. This will allow you to avoid being hit by major economic events for example.

It pushes you to diversify to protect yourself from crises.

However, this also contradicts what Warren Buffett sometimes says about diversification:

"​Diversification is a protection against ignorance.”

As always with the Oracle of Omaha, you have to learn to read between the lines. Warren Buffett's portfolio is actually diversified, but it is limited to about 30 lines. That's still relatively small compared to the portfolios of investors like Peter Lynch who happily exceed 300 lines.

So you have to diversify but moderately.

On Taking Risks - Never test the depth of a river with both feet.

Warren Buffett is not known for being an investor who likes to take excessive risks. He has an investment philosophy based on the value of companies, and he has always stuck to it no matter what. This made him miss the Tech wave in the early 2000s for example.

His philosophy can be summarized in this quote:

“Never test the depth of river with both feet.”

This means that you should only invest in companies and fields that you can understand completely.

This rule is good in my opinion, but only if you never stop increasing your knowledge throughout your life. Warren Buffett has clearly broken this rule for the past two decades, which makes him seem outdated today with the new rules of the stock market.

On your side, you should avoid taking too much risk, but to avoid missing out on new opportunities, you should constantly seek to increase your knowledge in all areas.

On Expectations - Do not expect honesty from cheap people.

Warren Buffett's advice is not limited to the financial markets. Warren Buffett frequently gives excellent advice on personal development.

One piece of advice I especially like from Warren Buffett is to never expect honesty from cheap people.

It is an extremely valuable gift that you can only expect from good people. This means that it is in your best interest to surround yourself with good people to succeed in life. For other people, Warren Buffett recommends distrust.

Final Thoughts

When the Oracle of Omaha speaks, the least you can do is listen. While his valuable advice on finance is generally well known, his advice on personal development is worth discovering.

By following the 6 tips I have just revealed, your success in life will not be guaranteed, but you will put the maximum chances on your side. The rest will be a story of patience and effort over time. In this sense, the story of Warren Buffett should inspire you.