If you want to be the best you have to learn from the best. That means, if you want to learn how to invest and make a good financial future for your self, you should learn from Warren Buffet. So what is his secret to do these great investments? I have choosen to summarize, what I believe is Warren Buffett's 5 secrets to be the best investor in the world.
Part 1- Time is Money
"Someone is sitting in the shade today because someone planted a tree a long time ago."
- Warren Buffett
This quote is a perfect example of how important time is when investing. The metaphor of planting a tree I especially like. All you need to do is to get the seed you want. You need to figure out the location. Then all you do is plant. Now all you have to do is let nature do its magic.
So lets say you choose to plant an apple seed. After 10 years your little seed has turned into full grown apple tree. Now one full grown apple tree usually produces 20 bushels of apples a year, which is around 840 pounds. One pound of apples can be sold for 1 dollar ( at the very low end) . That means 840 dollars per year.
This doesn't sound like a lot. But an apple tree usually has 20 prime producing years, that means that planting one apple seed can earn you 16800 USD in its life time.
So let's look at the return of this investment. One apple costs around 0.4 USD in the fruit store. Let's say we buy one of these. One apple usually has around 8 seeds. So that put the cost for one seed at around 0.05.
So my initial investment is 0.05 USD, and it brings me 16800 usd. So let's divide it. 336 000 percent increase of my initial investment. All I needed was time and patience, and a plan of what to plant and where to plant it.
So now let's say you invested in bitcoin instead in 2010. At this time one bitcoin was USD 0.01 per bitcoin. If we move forward to today one bitcoin is around USD 3645. That is a 364 500 percent increase. Look how incredible similar the return was of planting one apple tree to buying one bitcoin.
The return of these two investments were similar, and they had one thing in common. Be patient and look long term. Don't be the guy who, back in the days, bought a pizza for 10 000 Bitcoins. If he would have held on to them till today they would have been worth around USD 35 000 000. Time is money, so make sure to plant seeds, that can grow over time, and you will reap the reward for the rest of your life.
