My guru and inspiration — Warren Buffett!
Among the world’s richest men for past many years, Warren Buffett is admired and envied for his billions of dollars’ worth of wealth. We will any day be happy to achieve what he has accomplished.
However, despite being fully aware of his methods, techniques and the fact that they are not rocket science, we have failed miserably to garner even a tiny fraction of his success. Why?
“With me, illusions are bound to be shattered. I am here to shatter all illusions. Yes, it will irritate you, it will annoy you - that's my way of functioning and working. I will sabotage you from your very roots! Unless you are totally destroyed as a mind, there is no hope for you.” Though spoken by Osho, these words are apt to what Warren Buffett advocates and answers to, where we missed the trick.
One such myth, as per Warren Buffett : "Most of the investments like money-market funds, bonds, bank deposits are thought as "safe". In truth they are among the most dangerous assets. Their beta may be zero, but their risk is huge. Over the past century these have destroyed the purchasing power of investors in many countries even when they continued to receive timely payments of interest and principal."
The other day I noted that I was paying higher school fees for my child 'every year' than what my father had spent in the entire '16 years' from the first standard to my engineering. I dread how I would have educated my child, had I opted to play ‘safe’.
High inflation also ensures that we will find it difficult to meet the skyrocketing medical expenses if we solely depend on our fixed deposits, not to mention the day-to-day expenses from pins and potatoes to rents and recreations.
Unfortunately, we simply do not appreciate the corrosive power of inflation. As long as our capital ‘appears’ positive, we are happy.
However, inflation and higher taxes on interest income, together guarantee that our money growth in such ‘guaranteed-return’ products will NEVER match the rise in prices. In short, we become poorer day by day.
Therefore, I guess we have to reflect on our ‘faith’ in the safety of fixed deposits.
The bottom-line: Discover 'Why Are We Not as Rich as Warren Buffett'
...Know what other myths are shattered by Warren Buffett in my latest publication 'Your Guide to Finance and Investments'.
