March Madness is here. Have you made your
64 college basketball team picks?
Warren Buffett is insuring the Billion $ Bracket Challenge
if you can pick the perfect winning bracket. The good
news is it’s free to enter and you have nothing to lose.
The not-so-good news is that your chances of winning
are a quintillion to one. I never knew there was such
a word, quintillion, which is 1,000,000,000,000,000,000,
or 1 followed by 18 zeros. Maybe someone will break
the odds. I hope it is you.
Buffett is the most successful investor on the planet.
When it comes to investing, he knows how to put
the odds in his favor. There are so many investment
options available these days that it can seem like
choosing the right ones can drive you insane.
However, the Oracle of Omaha only invests in
something that he understands in order to
eliminate that madness.
I love Buffett’s famous quote: “Rule No.1: Never
lose money. Rule No.2: Never forget rule No.1.”
This is where you put the 5th philosophy of
Money on Your Terms to work by:
I invest my money wisely.
So what can you do with the money that
you have worked so hard to save? The last
thing you want is to put that hard-earned
cash in a bad investment.
Let’s face it; everyone would like to have
their investments grow as quickly as possible.
That is why we look at the vehicles that
have the highest rates of returns. We might
also be inclined to invest in a hot stock tip
from a friend or stockbroker to make a quick
buck. But these get-rich-quick possibilities
cloud our judgment, and we forget one small
thing: do we fully understand what we are
putting our money into? Naively putting money
into something that we do not understand
or haven’t fully researched results in a guarantee
that your money will leave you for good.
To eliminate the madness of investing, you
want to make sure you understand everything
about the investment. One of the many things
I like about Buffett is that if he doesn’t fully
understand the investment or company, he will
pass on it.
If you are interested in an investment or stock,
write out a few sentences about it. If you are
having trouble coming up with enough words
to write, it is a sign that you should not invest
in it. You should always, always, always know
why you are making an investment. Not until
you establish full clarity should you put your
money to work.
So educate yourself until you fully understand
what you are getting into when it comes to
investing. Put the odds in your favor like
Warren Buffett. By living philosophy #5,
I invest my money wisely, you will leave the
madness to the basketball court during the
month of March and away from your
investments year-round.