Warren Buffett, the octogenarian billionaire investor, is a friend we all need in the time of crisis. The business tycoon does not only pick the right companies but also faithfully delivers the sagacious life gospels. Millions take notes when he shares his wisdom on any topic. Buffett also practices what he preach, and that comes from the fact that even at the age of 89, he actively participated in Berkshire's four-hour-long virtual AGM in May.
The wisdom Buffett shares are timeless and profound, and lessons are not bracketed for investors only:
Cash Is Always King
Warren Buffett's Berkshire Hathaway had a record $137 billion in cash at the end of March. "We really want to be prepared for anything," Buffett said. "We never want to be dependent, not only on the kindness of strangers, but the kindness of friends."
This Warren Buffett principle for the cash reserves should be a lesson for all of us to weather emergencies. The cash at the end is the only thing which can help you wither away the uncertainties future may behold.
"Having loads of liquidity ... lets us sleep well," he said in his 2009 shareholder letter. Master the art of limiting your cerebral misadventurism, don't buy things you don't really need. Learn from Buffett that even if he sitting on hundreds of billions of cash pile, he would rather wait for a quality company which suits his portfolio, then dump his money on some junk.
Discretionary expenses are good for the gross domestic product of a country, but is indeed counterproductive for an individual. Buffett still lives in the same home he bought in 1958 and never spends more than $3.17 on breakfast. Be like Buffett.
Stick to your long term plans
“Someone's sitting in the shade today because someone planted a tree a long time ago." This is for people are get totally engrossed in the present problems. Our obsession with the volatility and uncertainties in the short term somehow undermines the remedial nature of the long term.
“Nobody buys a farm based on whether they think it’s going to rain next year," he said in a television interview. “They buy it because they think it’s a good investment over 10 or 20 years."
Your current actions should also have a long lasting impact, even if it is doing well for now. As Buffett says, "decide a business is worth investing in because it will last, not because it’s doing well right now."