Warren Buffett Profiled in Sunday Parade

Warren is an investing legend. At the age of 6 he was selling chewing gum at a profit of two cents per pack. He moved on to selling Coca-Colas and the Saturday Evening Post. By the time he was 9 or 10, cops stopped him for selling used golf balls. When cops talked to Warren's parents, they were not concerned. They felt Warren was simply being ambitious. Today Warren Buffett has an estimated fortune of $62 billion. (Article copied liberally from 7 September "Parade" article pp 4-6).

(Photo by Michael O'Neill)

Some of Buffett's money-making secrets are:

(1.) Reinvest your profits. In high school he and a pal bought pinball machines and put them in barbershops. They took the earned money and bought more machines until they reached eight. Eventually, they sold the machines, reinvesting the proceeds to buy stocks. By the age of 26, he'd amassed $174,000 or $1.4 million in today's dollars.

(2.) Be willing to be different. In 1956 and with $100k from a few investors, Warren ran his investments from Omaha, vice Wall Street. He focused investing in undervalued companies vice popular companies followed by the crowd. 14 years later he turned the $100k into $100 million.

(3.) Never suck your thumb. Gather information in advance, stick to deadlines.

(4.) Spell out the deal before you start. Your bargaining leverage is always greatest before you begin a job... that's when you have something to offer that the other party wants. As a young child he was hired to dig out the family grocery store from a blizzard. After spending 5 hours his grandfather paid him less than 45 cents. Buffett was disgusted and learned to negotiate before.

(5.) Watch small expenses. In another article he has stated be aware of the helpers. There are a number of companies that try to profit off of your investments. It's best to stick with basic index funds when compared against mutual funds and or heavily fee burdened hedge funds.

(6.) Limit what you borrow. Invest when you're debt-free. Buffett has never borrowed a significant amount - not to invest, not for a mortgage.

(7.) Be persistent. With tenacity and ingenuity, you can win against a more established competitor.

(8.) Know when to quit. He once bet at the race track and lost, only to bet again and lose again. After squandering nearly a week's earnings, he never repeated the mistake.

(9.) Assess the risks. Compare your potential gains and losses. Don't take the risk if potential losses outweigh gains.

(10.) Know what success really means. He measures success in life by how many of the people he want to loves compared against those that actually do.