When Charlie Munger, Warren Buffett’s business partner and Vice Chairman of Berkshire Hathaway, said, “The big money is not in the buying or selling, but in the waiting,” he emphasized the importance of patience and long-term thinking in successful investing.
As investors, what we are really trying to do is to ensure that we have enough money for a goal in the future. This goal may be a comfortable retirement, children’s education or a big purchase. The risk to us, simply put, is that we will fail to achieve that goal. This may happen because of many different reasons. A practical approach, which we can all adopt, is to know what these reasons could be and what steps we can take to protect ourselves.
What comes to mind when you hear the words asset allocation? Equity, debt, cash, gold and real estate. Maybe art and commodities, if you are so inclined.
But there is much more to it. The money that we have is limited. Our time on this planet is limited. Our energy is limited. And how we efficiently allocate accordingly matters a great deal.
Let’s direct our attention to what Arunasset calls the “big-picture allocations”, that will ultimately define whether you find success in life, and not just the financial kind.
It’s better to be wealthy than rich, even if you’re poor. – Author and NYT columnist, Paul Sullivan
That is the most accurate line I have come across in the context of being wealthy. And we are going to present you with three interesting stories that will help you understand.
If you want to be a great investor, you must resist impulsive actions and understand that the road won’t be straight.