High income but no saving and no investment = living high only.So, what are these nine (9) principles*?
High income with good saving and good investment = Fast track to financial wealth
Middle income with good saving and good investment = Guaranteed financial wealth in due course.
- Know the numbers and what they mean. Examples:-
- Earnings per share
- Price earning ratio
- Net income after tax
- Free cash flow
- Invest in products you understand.
- Stocks is share of ownership in a business and...
- Business provides goods and services.
- Read widely to value prospects.
- Price is what you pay. Value is what you get.
- Always maintain a margin of safety.
- Rule No. 1: Never lose money
- Rule No. 2: Never forget Rule No. 1
- Become a fanatic about investment
- Be passionate about investment.
- Get excited with business and numbers.
- Avoid buying "popular' stocks
- The dumbest reason in the world to buy a stock is because it's going up.
- The secret of compound interest
- Value investing is based on the compounding of interest.
- Buy stocks with good dividend.
- Reinvest the dividend income.
- Know when to invest.
- It is not about time the market but....
- Buy when everybody else is selling off.
- Never run with the street pack.
- Risk comes from not knowing what you are doing.
*Extracted from: Warren Buffett: Master of the Market by Jay Steele. Published in 1999.