Investing is forgoing consumption now in order to have the ability to consume more at a later date.
Interpretation
Investing involves sacrificing present enjoyment to increase future wealth.
Warren Buffett emphasizes that the essence of investing lies in refraining from spending your money today to enable greater financial opportunities in the future. This quote highlights the principle that wise financial decisions made now can lead to increased resources and consumption capabilities later, underscoring the importance of delayed gratification in wealth accumulation.
In practice
In a financial seminar discussing the importance of investing for retirement.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
Oneβs objective should be to get it right, get it quick, get it out and get it over. Your problem wonβt improve with age.
If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
I like Burton Malkiel's 'A Random Walk Down Wall Street.' He comes to the same conclusion that I do - that indexing is the way. My 'Little Book of Common Sense Investing' says pretty much the same thing.
Debt is so ingrained into our culture that most Americans can't even envision a car without a payment ... a house without a mortgage ... a student without a loan ... and credit without a card. We've been sold debt with such repetition and with such fervor that most folks can't conceive of what it would be like to have NO payments.
Long-term investing has gotten so popular, it's easier to admit you're a crack addict than to admit you're a short-term investor.
Net return is simply the gross return of your investment portfolio less the costs you incur. Keep your investment expenses low, for the tyranny of compounding costs can devastate the miracle of compounding returns.
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