Oh, my Hero!

Learn from the guru! Someone emailed to me Maxims of Warren Buffet…2009 Words of Wisdom.

Guru Warren Buffet’s words of financial wisdom say: If you buy things you don’t need, you’ll soon sell things you need. Now, different people has different version of needs. Why? Because some just could not differentiate needs from wants. Till they do, they may still be buying the wrong things! Just imagine having to buy 20 handbags, 30 pairs of shoes, 50 designer clothes and 2 sports cars to later find the need to sell off the house to settle all the debts!
Guru says: Don’t save what is left after spending; spend what is left after saving. Very wise indeed advising us that we should force saving to curb spending. Provided the spending now is larger than just the monthly rental, utilities, commitments etc, yes? If not, it would be a bit difficult to curb. Not enough to live by would make it impossible to save, I guess.
Guru says: All hard work brings profit; but mere talk leads only to poverty. Yes, so long as we work hard, we would be paid for our effort irrespective of how much we are being paid for. But there are times when hard work does not pay. Sometimes it is better to work smart instead. Whichever, it would be better than “No Action, Talk only”! No pain, no gain. Nothing given, nothing returns. No work, no pay. Enough! I bet you know what I am trying to say.
Guru says: A sleeping lobster is carried away by the water current. Guess he’s talking about us being sensitive to our surroundings? We must update ourselves with the latest information about what’s going on with the economy and the financial world. If the share market is crashing, we should quickly cash out our investment in shares and place it in the money market? If not, we would lose all our hard earned money invested in the share market!
Guru says: Never depend on a single source of income. Let’s see, we should work for our salary, save to earn interest, and invest to earn dividend or capital gain when the value of the investment increases? What about winnings from lottery tickets? Or does he simply mean that we have to have at least two jobs or businesses at any one time?
Guru says: The borrower becomes the lender’s slave. This is tough! We need to work harder to get those people off our backs? Or we are working to earn for them? But we got the money from them first to spend. We are just spending ahead of our earnings, yes? Guess he’s right. If we do that, we have to work double hard today to earn for today and repay for yesterday. In most times, interests are included.  And sometimes at their mercy too.
Guru says: It is no use carrying an umbrella if our shoes are leaking. I must try to understand this. We use an umbrella to protect ourselves from the rain. Okay, we will get our feet wet because our shoes are leaking. In other words, we still get ourselves wet even though our body may be dry. So? Does it mean that there is no point for us to protect ourselves with savings if we are still a spendthrift? Money deposited in the morning will be withdrawn by the afternoon? My, what a waste of time indeed!
Guru say:s Beware of little expenses; a small leak can sink a large ship. This is pretty frightening. If we are not watchful and get into details of our spending, we could accumulate too much unnecessary expenses that could put a hole in our pocket. Does it then mean that we ought to be stingy, miser and calculative?
Guru says: Never test the depth of the river with both feet. We are clever people; if we could not see the bottom of the river we would normally test the depth with a stick, right? I am no water lover, so you would never find me testing any depth of the river with both my feet! But in finance sense, what does it mean? Is he talking about risk? Does it simply mean we must be aware of all possible risks before we invest? If we are not aware of the risk we are taking, just do not invest?
Lastly, Guru says: Don’t put all our eggs in one basket. This is simple. It must be not to invest all we have in one source. We either diversify the source of investment or the type of investment itself. Maybe it is about saving in different banks or saving in savings account, fixed deposits and unit trusts in the same bank. Clever, huh?
Whatever the understanding or analysis of his wise words, we must always learn from the Guru! Especially from my hero Guru, the one and only: Warren Buffet
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