Warren Buffett - 7 Ways To Be Rich Like Him

Warren Edward Buffett popularly known as "The Oracle of Omaha" or "The Sage of Omaha" is the 3rd wealthiest man in the world currently. He was previously ranked number 1 in 2008 and number 2 in 2009. He is only ranked below Mexican Telecoms Billionaire, Carlos Slim (Number 1) and Bill Gates (Number 2).

He was born on August 30th, 1930 to Mr Howard, a stock broker -turned congressman. He started showing interest in business and money at a very tender age.

He had a steady rise to business stardom by trying his hands on a variety of businesses, and correcting his mistakes. He sold chewing gum from door to door as a child; he also sold weekly magazines, stamps, golf balls, detailing cars, etc while in school.

At age eleven, he bought three preference shares of cities service at $38 per share for himself and his elder sister Doris. The share later fell to $27 and then rose to $40. He quickly sold the shares out of panic, only for the share to rise to $200 later. That mistake thought him how to be patient while doing business.

He was later mentored by Ben Graham who had earlier learnt to invest in cheap stocks that were almost completely devoid of risk. The experience he acquired from Ben Graham propelled him into investing in stocks of several great companies later.

A look at his life showed that at the age of 15 (1945), he bought a pinball machine with his friend, which they placed in a local barber shop; within a few months, they were able to buy several more machines and placed them in different barbers' shops. In 1950, at the age of 20 years, he had saved $9,800. He became a millionaire in 1962 at the age of 32 years; he became a billionaire in 1990 and eventually the world's wealthiest man in 2008.

The legendary investor is the chairman and CEO of Berkshire Hathaway (a textile company): he is an investor, industrialist and philanthropist. He has shares in several companies including GEICO, Washington Post company, ABC, General Electric, Burlington Northern Santa Fe Corp, Goldman Sachs, Dow Chemical, Procter and Gamble Co, Johnson and Johnson, Verisk, WESCO, Sanborn Map company, etc.

What has been responsible for his business success?

1. Patience: Warren Buffett learnt through the hasty sale of his Cities Service's shares, that patience is the nucleus of business success. Ever since, he never sold any shares as a result of a small change in business expectations or projections; he never did anything out of panic anymore. He is always ready to wait for the right change to come. So if you want to be like him, you must learn to be patient.

2. Wise investment: The Oracle of Omaha never invests anyhow; he takes his time to study the company he wants to invest in - he checks their track records, their balance sheet, the worth of their shares, etc before making his moves. So be wise enough if you must be like him; know when to grab opportunities.

3. Focus: Warren Buffett is a very focused investor who knows what he desires to be at a given period, and mobilizes his resources to pursue his goals. Once he starts he does not get distracted. He follows his plans and makes sure his dream is met. When he needed to invest in stocks, he took time to visit the Stock Exchange; met with Ben Graham to discuss the prospects of investing in his company, etc. So remain focused and don't let anything distract you from your dreams.

4. Mentorship: The sage of Omaha did not just jump into buying stocks; he took time to learn the rudiments of the business. He was mentored by Ben Graham and Phil Fisher even though his father was a stock broker. He took time to understand the principle that separated the super investors from the other investors. You need to get an experienced person to mentor you. It makes things easier for you.

5. Re-investing: He invested and made profits. The profits from his investments were re-invested. For example, when he bought the pinball machine, the profits he made from it were used to buy several machines within a few months. So don't waste your profits; re-invest them and they would gradually move you up the ladder of business success until you become like Warren Buffett.

6. Frugality: Even though the legendary investor is very wealthy, he does not waste money: he tries to live a modest life and spends money only on things that are truly necessary. He tries as much as possible to conserve his wealth. If you must retain your wealth, you have to be frugal; acquire goods and services in a restrained manner and make sure you use your economic goods and services to achieve longer goal terms in a resourceful way.

7. Risk taking: He is a risk-taker; he ventures into areas where some of his competitors are afraid to go into. He sees an opportunity in periods of market fluctuations and invests when he is convinced it would be to his advantage in the long run. You should also not be afraid to take risk especially if you are sure it would turn out to be worth it in the long run.

Joseph Ezie Efoghor is a small business manager with an enviable track record. For more of his articles visit http://smallbiztricks.blogspot.com