I could never get enough of Warren Buffett. I follow him on Twitter (and follow everyone he follows), his name would be the red flag that would make me read financial reports and updates (and countless finance websites I subscribe to that send me maybe 20 emails a day), and I even tried to join his 10,000 Women.
I cannot help it. He was there at my first foray into the world of money and investment through a book given to me by a mentor: The Tao of Warren Buffett, by Mary Buffett and David Clark. That introduction so inspired me that I have dedicated my life to learning all I can about this enigmatic thing, wealth, which has the power to change lives – not only the money earner’s but everyone’s. Buffett, the philanthropist, showed that it can be done (and should be done). I moved on to learn the principles of Kiyosaki, Orman, Coelho, Bo Sanchez, Ramit, Tim Ferris, Dan Kennedy and countless others.
But I always go back to Buffett and his principles. Here are three and some life’s lessons.
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1
I failed at Rule No. 1.
I just came home from the States and was making my rounds visiting friends. This particular friend was a favorite and something about her caught my eye. She was wearing a curious bag, brown and locally made and it had dangling from it, very interesting big stones. But they were not stones. They were “charms”. I was to find out later that they came in bracelets too and that they brought people “luck”. Luck! I was intrigued. I just came from a Western nation where there was no place for charms or luck and having seen these colorful, enchanting reminders of the way of life I left behind, I was at once captivated. I had an inspiration to go into business selling charm bracelets! I put in an order for so many bracelets that cost me USD$600 and I took it upon my head that I could sell them in the country that I just left.
Of course it did not work.
It was interesting that my friend’s friend (the owner) appeared not too enthusiastic to sell to me. I was intrigued by this but did not think much of it at that time. On hindsight, I should have. She was a feng shui master and she probably looked into my present and saw that it was not an auspicious time for me to be selling charm bracelets.
And so I lost the $600, which to me, then, was a lot of money (okay, okay, it is still a lot of money today).
But some important lessons were learned. One, do not go into a business that you do not understand (selling). Two, do not leave the selling to other people and think you can just sit there, oceans away, and make lots and lots of money. Sometimes it works, most of the time it does not. Three, do your due diligence. Find out about the business, does it sell, can you get the goods for less (I did not really haggle that time), how long before you make the first installment, can you get a discount for bulk, are there existing flyers to help you promote the business, how many months before you get the ROI (return on investment), what is the possibility that it would fail and is it surmountable? Four, have a marketing plan – launch the product, join trade fairs, do vigorous email marketing, provide incentives or discounts, testimonials, product review – that would span months, or years.
I still get excited at business prospects more than I should have, sometimes. But I am more cautious too, thanks to Rule No. 1.
Rule No. 2: I made my first investment at age eleven. I was wasting my life up until then.
I made my first investment when I married my investment who was a diamond-in-the-rough who has got so much potential and every day is a wonder seeing that potential come true.
I am kidding. And not. I think marriage is an investment of sorts. Your financial future depends upon whom you marry, not the person he or she is at present (because that might not be much) but his potential, because more than the net present value, it is that potential that makes it possible for the future to give its limitless rewards. Love could enable a person to see into the future (it has a reputation for blindness too, but maybe that is an afterthought invented by people who did not work at it), and belief can help the “potential” come to life.
I remember my father-in-law saying that he does not want a rich man for his daughter. He wants someone with a mind of a businessman (like him), because only a businessman can give his daughter the life of ease and happiness – limitless – that he wants for her. She got him.
And I got mine.
But like all investments, marriages (and people) should be nurtured so the material and the non-material rewards (which are more important) would come.
The investment has paid off and hubby’s genius has made it possible for me to start investing (business, stocks, mutual funds). Yes, it did not happen at age 11, but I do not think I have wasted my life until then. I was nurturing a diamond.
Rule No. 3: You can’t make a good deal with a bad person.
There is a problem – how to tell if a person is good or bad. It is not always easy. Some people have tongues of honey and can talk you into anything. I particularly remember one. He played the piano like Rachmaninoff, office was set up in one of the most expensive parts of town and he was even a geomancer with an impressive reputation (we did not check). We were surprised and flattered that he wanted to go into business with us. But before we put in the money, there was a news explosion – he was actually a con artist who scammed people in Asia and in the United States.
It was a close call.
When dealing with persons (whether referred to you or not) and you will do business with that person (the amount of money does not matter), extensive research should be done (Google may help), questions should be asked, plans should be carefully analyzed, contracts drawn up. If all else fails, trust the gut.
And have fun learning from life.