I often write on Quora.com, where I am the most viewed writer on financial matters, with over 301.6 million views in recent years.
In the answers below I focused on the following topics and issues:
- What do successful people do differently in the areas of health, wealth, or finding a spouse? I speak about the commonalities I have observed.
- What tips can I give people starting their own business, apart from the obvious things?
- What are the main tips from Warren Buffett which are useful for the average person? I go over some of his more down-to-earth suggestions for average investors.
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I am not an expert in health or finding a spouse. All I will say is that I have noticed the following commonalities between successful people and those things:
- Successful people are more likely to take their health, mental and physical, seriously.
- People who achieve success are more likely to avoid toxic spouses and friends
In terms of wealth, the biggest ones are
- Successful people are more likely to know what they want to achieve. How do they, themselves, define success. It isn’t easy to become successful unless you know how you define success.
- Focus. Not only focusing on what needs to be achieved, but focused in terms of mentality. The focus is often on not “how much can my money buy me, but how much can my money earn me”. Too many people who want success are on a hamster wheel.
- There isn’t a big focus on impressing random people. Those who achieve success often don’t spend as much as you would expect.
- A big commonality is having a long-term plan and sticking to it. If you notice those articles on “everyday millionaires”, that focus on multi-millionaires from normal backgrounds, you will notice some commonalities such as:
- They invested long-term
- The invested positions were often held for decades, through thick and thin, and various market crashes.
- There was an avoidance of issues like multiple divorces
- Investment fads were largely avoided
- Basically the investment strategy was very boring. Buy and hold “forever”
5. They delay gratification. Many people think “what is the point in being old and rich”, so they decided to live for the moment”.
6. Money isn’t necessarily the main focus. The bigger focus is freedom – the ability to retire, sleep in until 11am or whatever else you want.
Now sure, that in itself defines money and wealth is definitely one of the top two or three factors.
Yet often things like freedom are the reason why people want to achieve wealth to begin with.
7. They don’t feel growing wealth is a bad thing. It is amazing how many people out there are against the rich but want to make loads of money themselves!
Many people who grow wealthy have this mentality below:
In other words, they don’t think growing rich is a bad thing, and are keen to give back to society as well.
8. Persistence is key. Loads of people can work hard. Many people can even work hard for a few years.
Yet how many people do you know who could work hard for a decade, making less than the minimum wage, trying to build up a business?
Then it is fewer people. Few people are willing to work hard, smart and take loads of calculated risks.
9. As per the last point, taking risks is also key. Not stupid risks, but sensible calculated ones.
Simple example. Let’s say you have two people. They both had a decent job in the 1980s.
By 1990 they both had $200,000 sitting in the bank. Person 1 puts it in the bank.
Person 2 invests it into the S&P500. How much would they both have today?
Person one would have about $400,000. Person two, about $2.5m, if they reinvested the dividends.
Yet person two hasn’t worked harder than person one, they have just been smarter.
Likewise, I have personally seen people do amazing things in workplaces, yet if you fast forward a decade, one or two people are ahead.
The reason is often calculated risks. The people who are willing to start their own business or get paid on performance can eventually make ten time (or more) more than the salaried employer.
10. The avoidance of bad luck
Even if people do all of the above, of course any of us could have had a heart attack attack at 21.
We all get good, and bad luck, but very bad luck can stop people in their tracks.
Luck also becomes more important than it comes to extreme success.
One of the best Mark Cuban quotes is (I am paraphrasing) “if I was born again, could I become a billionaire? I am not sure. That takes luck. A millionaire? No problem”.
11. They bounce back and don’t blame others
As mentioned, we all get bad luck. Yet it is normal for some people to blame that bad luck on others.
Take Covid. It was very bad luck for people in certain industries.
Yet a small percentage of people in those industries like hospitality is now making more than ever, by pivoting.
Others are making less but saved and invested a lot during the bad times.
Then there is a third group that didn’t fix the roof when the sun was shining and failed to pivot.
Those people sometimes blame others for their current troubles.
12. Managing risk is important
Getting back to that last Covid point, people who have weathered the storm prepared for a black swan event like a government shutdown.
Being optimistic is great. Yet it is also important to hope for the best and plan for the worst.
The biggest ones are
- Be realistic about what running a business is all about. It isn’t about ideas, it is about execution. It isn’t always about getting loads of funding. Sometimes it is about organically building up.
- Get a job first and then start your own business
- Understand risk properly. We can’t prepare for all risks but we can do things like:
- Keep costs down by going online
- Selling international to reduce risks
5. Try to get into nieces and solve other people’s problems
6. Get your customer acquisition costs down, ideally via utilizing online tools
7. Play the long game
8. Focus on scalability
9. Focus on using time efficiently as it is the only resource we can’t get back. If needed, but time and outsource once you are strong enough
10. Be brave when others are fearful, and fearful when others are complacent. Take Covid. The costs of ads plummeted. That is because most people were in “wait and see mode”. 18 months on and they are more expensive for obvious reasons. Take calculated risks.
11. Have private investments as a business owner.
12. Read a lot but nothing beats experience
13. Focus on recurrent revenue even more than upfront. It is more long-term and stable. If you are always needing new customers to pay the bills, like some real estate and recruitment firms, you could go out of business even if you have had decades of success. The reason is simple – you always need new customers.
14. Learn about the 80/20, 64/4, and 50/1 rules and how to use them.
15. Adapt to changing times
16. Take yourself out of your comfort zone
17. Productive beats perfection. If you want to start a business, and you have the needed experience and customers to go, it is far better to just start with a “bad” free website and start slow than waiting for perfection
18. Define your ideal customer. Turn away people you don’t want once you are big enough to do so. The best restaurants have a waiting list. The “elite” coaches only have a limited number of clients. Do the same in your business eventually.
19. Break industry norms. Don’t be like everybody else.
20. Take constructive feedback. Don’t care about the thoughts of random people though. Certainly, don’t listen to the naysayers.
21. Double down on your strengths and outsource your weaknesses. Don’t waste time “working on your weaknesses”
22. Get rid of toxic people. Spent more time with great people.
23. Don’t get complacent if you become successful.
24. Play the numbers game. Try loads of ideas and one will work. Best to do many small tests.
25. Learn from previous mistakes. Making mistakes is natural. Making the same mistakes loads of times isn’t.
26. Don’t change a winning model too quickly. Adapting is important but if something is working well, it makes sense to keep to the same fundamental model, and then gradually adapt and change that winning model. There are exceptions to this rule though.
27. Don’t get stung by criticism if your winning model has its critics. If you don’t have critics you aren’t doing enough right!
28. Don’t focus on hiring and motivating people. Get motivated people to work for you to begin with.
29. Try some easy wins like change your residency to lower your taxes, or going online to save costs.
30. Don’t be afraid to hire people smarter than you.
One of the least known quotes from Buffett is when he accredits a portion of his success to taking a course on communication.
Ultimately, the ability to communicate well is one of the keys to his, and many people’s, success.
Plenty of very smart people struggle with communication, which harms career enhancement opportunities.
What is important about the above quote is that this is something many people can follow, and not just a select few.
The more you learn, the more you earn, especially if you learn in the right areas.
Beyond that his best advice for the everyday investor is:
- Invest in the whole stock market if you can, through ETFs, or stick to what you know.
- Don’t try to time the stock market
- Don’t be fearful during those extreme moments for the stock market like 2008 and 2020.
- It is a mistake to put too much into government bonds at a young age. Bonds are less volatile than the S&P500. That doesn’t mean they are safer if they hold long-term.
- Holding a position should mean “forever” for many investors. If you want to buy an investment today, you should believe in it for the long-term.
- Focus on what an asset is yielding. If investor A gets 10% gross rental yield and investor B is focused on capital appreciation, the first investor is an investor whereas the second is a speculator. The reason is simple – he/she is trying to sell the same asset for a higher price later on.
- Invest at the beginning of the month, and not at the end.
- Most of the news out there is just noise
- The best kind of investing is usually boring
- Borrowing too much money is the most common way very smart people go broke.
The best advice is usually simple, rather than very technical.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 301.6 million answers views on Quora.com and a widely sold book on Amazon
In the article below, taken directly from my online Quora answers, I spoke about the following issues and subjects:
- How can I invest some money while living in Greece?
- Is the UK an easy place to live?
- Are online stock brokers as reliable as bricks and mortar ones?
- Is it possible to live on a low budget in Tokyo, Japan?
- If you buy numerous ETFs which are invested across loads of companies, potentially thousands globally, do you need bond ETFs as well?
To read more click on the link below