Doubling your net worth by taking big risks is not wise.
Borrowing money is one way to get rich quickly, but it’s not a good way.
Compare aggressive borrowing and reckless trading to gambling.
New Delhi. Every successful person definitely follows some such rules or habits, which help him to reach new heights. But there are some habits that can take any person to a trough. The whole world knows and understands this thing. The same thing applies in the investment world as well.
Warren Buffett, the world’s biggest investor, believes that no person should borrow money to invest in stocks. He has repeated this point many times. He has recently mentioned some such bad habits, which are enough to sink any investor. Warren Buffett, referring to his longtime partner Charlie Manger, said that he knows three ways that can eliminate any smart person. These modes are called 3 L.
Why did you say so?
In an interview with CNBC, Buffett said, “Lending money on securities is crazy in my opinion. It’s risking what you have and someone you need something you really don’t need. You won’t be happier if you double your net worth.”
He said that borrowing money is one way to get rich quickly, but you have many ways to get rich slowly and you will have a lot of fun getting rich in these ways.
Cause of Waste – Liquor, Ladies and Lavage!
Warren Buffet said that his business partner Charlie (Manger) says that there are only three ways, which can destroy any smart person – alcohol (liquor), women (ladies) and leverage. “Now the truth is, the first 2 methods are added because they start with L, while the main thing is leverage,” he said. He said that even asking for money can be the reason for the ruin of a person.
Borrowing like trading gambling
In a letter to shareholders in 2014, the billionaire investor and CEO of Berkshire Hathaway compared aggressive borrowing and reckless trading to gambling. Buffett said, “It is madness to risk losing what you need to get what you want.”
FIRST PUBLISHED : September 19, 2022, 17:28 IST