Create the “Warren Buffett” Mindset
Financial Security, “the peace of mind you feel when you aren’t worried about your income being enough to cover your expenses and you have enough money saved to cover emergencies and your future financial goals.”
In a perfect world, we all would begin saving for the future from the moment we’re born. All those gifts of $1, $5, $20, etc. at birth and at their first birthday party would be set aside in an investment account to begin multiplying. Here’s an example of what that could look like:
$100 is put into an investment account for a 1-year-old child. Each month, $10 is added to the account. Based on decades of research, the average return will be 10% per year. By the time this child is 60 years old, they will have accumulated $391,737. Not bad for a $10 per month investment!
Unfortunately, this example is rare. In the picture below are the stats on Baby Boomers and Gen-X’ers and how prepared they feel they are for retirement:
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Many years ago, I worked as an Investment Banker for one of the largest financial institutions in the world. As I discussed planning for the future, many expressed fear, doubt, and worry. They wondered if the investment choices they had made in the past, and those they were making at the time, were going to generate the income they needed. Some clients were concerned about just making it through each month. Some were unable to make it week-to-week without borrowing money. And here’s what is most important; The more a client was concerned about the present, the more fear they had, which means they behaved like a person in fight-or-flight mode and were making poor decisions based on emotion.
Some of the worst mistakes I saw was during a time when the Stock Market took a downward tumble. As they saw their stocks become devalued and worth less than what they paid for them, they began to sell off, just like most novice investors. No matter how much I explained to them to hold steady because the Stock Market is predictably cyclical, they placed their orders to sell.
When the downward spiral was over and the rebound began, many of these people who had been filled with fear and chose to sell their investments had lost 30%, 40%, and even 50% of their portfolios. Because they had sold, their stocks they didn’t have the funds to take advantage of the upturn in the cycle. Those who kept their fear in-check regained the value of their stocks and added to it as the next few months went by.
Warren Buffet had a different mindset during the downturn. It was as if the Stock Market had a huge sign out that read:
“Huge Sale on Investments! Deep Discounts! Limited Time, So Buy Now!”
Mr. Buffett was buying when most investors were selling…cheap! This type of event is called “Transfer of Wealth”. This is one example of how the rich get richer and poor get poorer. Again, note Warren Buffet. It’s estimated that in just two (of the many) deals he struck during the Great Recession, Buffett added a staggering profit of $10 billion.
Would you like to hear more about the “Warren Buffett” mindset and how you can possess it? Just click on the following link to watch my interview: https://www.youtube.com/watch?v=D0Zq3zQ28Gg
About Dr. Edward Lewellen
Dr. Edward Lewellen is an expert in creating methodologies for people to learn to use their mind; their beliefs, thoughts, and behaviors, and put them back in control of their lives and become top-producers. He is a Master Executive Coach, leadership and sales expert, and keynote speaker for some of the largest global organizations.
Author of:
Life Mastery: The Fully Functional Life
