2. Be independent
Only in fairy tales are emperors told they’re naked.
Maybe the hardest part of investing is that the greatest odds of being right come when most think you’re wrong, and vice versa. If your plan is to watch CNBC and invest in what the most talking heads like, you’ll likely end up with average results at best.

3. Prepare ahead
The only way to win is to work, work, work, and hope to have a few insights.
The past decade was defined by delusions of success: Buy a house, and you’ll be rich. Have a credit card, and you’ll be rich. Buy penny stocks, and you’ll be rich. Live in America, and you’ll be rich. None of it was true. But this fact is as true today as it’s been for eons: The best way to become financially successful is to work hard, save harder, learn a lot, and invest patiently and prudently.

4. Have intellectual humility
Acknowledging what you don’t know is the dawning of wisdom.
A related Munger quote: “The iron rule of life is that only 20% of the people can be in the top fifth.” Sad, but true. You’re not Warren Buffett. You don’t know what’s going to happen next year. You might not even know what a balance sheet is. It’s OK. And not just OK, but vital to admit it, and either pass on things you don’t understand, or learn from someone who does.

5. Analyze rigorously
Use effective checklists to minimize errors and omissions.
There’s truth to the adage that people spend a month researching a new dishwasher, but 10 minutes researching a new stock. Take your time. Be patient. Be selective. Read annual reports. Crunch numbers. Get other people’s opinion. This is your hard-earned money we’re talking about.

6. Allocate assets wisely
Proper allocation of capital is an investor’s No. 1 job.
Last fall, stock funds were liquidated en masse while money market funds got inundated with demand. No doubt this was because investors feared that the worst was ahead. But it also took a big, scary event to make people realize their allocation was dangerously skewed. Too many stocks, too little cash. The worst part is that most of these investors had to either sell or increase cash savings at precisely the same time stocks were cheapest.

7. Have patience
Resist the natural human bias to act.
It all comes back to one of Buffett’s most famous sayings: “The market is there to serve you, not instruct you.”

8. Be decisive
When proper circumstances present themselves, act with decisiveness and conviction.

9. Be ready for change
Live with change and accept unremovable complexity.
If the past two years taught us anything, it’s that what you don’t think can happen not only can, but probably will. In both personal finance and investing, there’s no more dangerous place to be than relying 100% on a certain set of circumstances. That’s just not how life works.

10. Stay focused
Keep it simple and remember what you set out to do.
As Dale Carnegie said, “Success is getting what you want. Happiness is wanting what you get.” It doesn’t get better than that.

Follow the practical way,
George

With an estimated fortune of $62 billion, Warren Buffett is the richest man in the entire world. In 1962, when he began buying stock in Berkshire Hathaway, a share cost $7.50. Today, Buffett, 78, is Berkshire’s chairman and CEO, and one share of the company’s class A stock is worth close to $119,000. He credits his astonishing success to several key strategies, which he has shared with writer Alice Schroeder. She spent hundreds of hours interviewing the Sage of Omaha for the new authorized biography The Snowball. Here are some of Buffett’s money-making secrets—and how they could work for you.

1. Reinvest your profits
When you first make money, you may be tempted to spend it. Don’t. Instead, reinvest the profits. Buffett learned this early on. In high school, he and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stocks and to start another small business. By age 26, he’d amassed $174,000—or $1.4 million in today’s money. Even a small sum can turn into great wealth.

2. Be willing to be different
Don’t base your decisions upon what everyone is saying or doing. When Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not on Wall Street, and he refused to tell his partners where he was putting their money. People predicted that he’d fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Buffett, the average is just that—what everybody else is doing. To be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world’s.

3. Never suck your thumb
Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking “thumb-sucking.” When people offer him a business or an investment, he says, “I won’t talk unless they bring me a price.” He gives them an answer on the spot.

4. Spell out the deal before you start
Your bargaining leverage is always greatest before you begin a job—that’s when you have something to offer that the other party wants. Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance—even with your friends and relatives.

5. Watch small expenses
Buffett invests in businesses run by managers who obsess over the tiniest costs. He once acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only the side of his office building that faced the road. Exercising vigilance over every expense can make your profits—and your paycheck—go much further.

6. Limit what you borrow
Living on credit cards and loans won’t make you rich. Buffett has never borrowed a significant amount—not to invest, not for a mortgage. He has gotten many heartrending letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you’re debt-free, work on saving some money that you can use to invest.

7. Be persistent
With tenacity and ingenuity, you can win against a more established competitor. Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.

8. Know when to quit
Once, when Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick—he had squandered nearly a week’s earnings. Buffett never repeated that mistake. Know when to walk away from a loss, and don’t let anxiety fool you into trying again.

9. Assess the risks
In 1995, the employer of Buffett’s son, Howie, was accused by the FBI of price-fixing. Buffett advised Howie to imagine the worst- and best-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself “and then what?” can help you see all of the possible consequences when you’re struggling to make a decision—and can guide you to the smartest choice.

10. Know what success really means
Despite his wealth, Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He’s adamant about not funding monuments to himself—no Warren Buffett buildings or halls. “I know people who have a lot of money,” he says, “and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”

1. All successful people have a vision. They have the ability the “see” clearly what they want before it exists. – Bill Gates

2. Some of success is luck. Just being in the right place at the right time. – Bill Gates

3. When you find a good idea act on it right away. – Bill Gates

4. Absorb, assess, and then act. Knowledge without action is impotence. – Donald Trump

5. Avoid your comfort zone — it’s probably outdated anyway. – Donald Trump

6. Resolve to be bigger than your problems. Who’s the boss? – Donald Trump

7. If you’re honest, you should know the questions that should be asked, as well as the answers. That’s probably why there’s so much confusion out there today. – Donald Trump

8. Do business with people you like and who share your objectives. – Warren Buffett

9. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently – Warren Buffett

10. Borrowed money is the most common way that smart guys go broke. – Warren Buffett

11. Price is what you pay. Value is what you get. – Warren Buffett

12. Strive to become a market leader. Own and control the primary technology in everything you do. – Steve Jobs

13. Ask for feedback from customers of diverse backgrounds – Steve Jobs

14. Learn from failures, admit it and move on. – Steve Jobs

15. Learn continually from people within and outside of your company. – Steve Jobs

16. You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. – Steve Jobs

17. Have a clear articulation of what your value proposition is – what makes you different? – Michael Dell

18. Tough times present new opportunities and the seeds can be sown for future successful companies. – Michael Dell

19. There’s never been an easier time to connect with customers all over the world – utilize social media opportunities like blogs, Facebook and Twitter. – Michael Dell

20. Find something that works well and then replicate it. – Michael Dell

21. Take advantage of the resources around you – people, technology and suppliers. – Michael Dell

22. Keep your messages simple and clutter free to reach your market faster. – Jack Welch

23. See change as an opportunity-keep an eye out for changes to your business. – Jack Welch

24. Business opportunities are like buses, there’s always another one coming. – Richard Branson

25. Big businesses will always try to crush small upstarts. To beat big businesses, use the strengths of being small. Big corporations are impersonal; staff is often not treated well. At a small company, you can make sure your staff is proud of working for you and then they’ll work hard to be successful. And small companies are more nimble. – Richard Branson

26. If you’re a successful entrepreneur, wealth comes with it. A responsibility comes with that wealth. – Richard Branson

27. A good company runs as if it is a family. If your son messes up, you don’t kick him out of the house. – Richard Branson

Follow the practical way,
George

This is one of the latest books of Donald Trump that he wrote together with Bill Zanker from the Learning Annex. They draw from their experiences in life to provide practical advice on how to think big in your life and achieve what you want. Donald gives many examples from real estate and his experience with dealing with famous people. Bill’s prospective is different. He draws his examples from the struggles that he had in starting the Learning Annex and transforming it into a successful company.

They recommend that is very important to find your passion and follow it. Do not do something for money, but because you are passionate about it. Then the money will follow. You need to go after your passion with 150% focus and to focus on the solutions to the problems that you will encounter and do not be dishearten by the problems. They say that you should follow and listen to your instincts because many times they will guide you through difficult situations. Their discussion of luck is very interesting. They point out that luck is created by hard work and not waiting for something to come to you.

There is a large portion of the book that is focused on been very competitive, gaining respect from your colleagues and going after people who are trying to hurt you. They talk about the jungle of the business world and that you need to be the strongest to survive, because people will always try to bring you down. What is very important as well is to build momentum and not to stop when you start to achieve things. Slowing your momentum will cause you to relax and you will lose your edge.

Their final advice is that if you want to think big you also need to act big. You need to show it in your everyday life. You need to have friends who have big dreams like you and learn from them.

In general the book is very interesting and discusses many personal characteristics that successful people have that you can easily copy. The examples that Bill gives from running the Learning Annex are very remarkable and show how big his thinking has helped him to grow his business.

Follow the practical way,
George

This is a great book for anyone who is interested to invest in the stock market and run a business. The book describes the life of Warren Buffett from the day he was born up to 2008. The lessons are drawn from both his personal and his professional life.

Warren got involved in a very young age in the process of making money and managing other people’s money. When he was a kid he took his sister’s money to invest in a stock. This stock went down and everyday his sister would ask him why the stock is down. Warren did not like that experience at all and from that day on he did not want to manage other’s people money unless he knew he could do a great job. This gave birth to his first rule of investment “Never lose the money.”

You can find a lot of details on his management style in the book and how he pushes his people to get the best out of them. He believes that a smart person can do a great job and lets them do their job without him interfering. He is very good in showering his employees with praise and then at the same time giving them more tasks to do.

In the last few chapters of the book, you can see his ideas on philanthropy and inherited wealth. He is not a big fun of people leaving all their possessions to the children because that stops them from growing and achieving their own great things. He gave away the majority of his wealth to the Bill and Melinda Foundation.

I strongly recommend that you read the book and get a glimpse on how the greatest investor of all times created his fortune following simple rules and a lot of focus.

Follow the practical way,
George

After watching Series 1 & 2 I was really looking forward to watch the third one. I find the advice that Donald gives valuable and I think it can help people become winners.

The third series of “The Apprentice” is full with more advice on the same topics. By now you will start to see certain topics repeating themselves. Donald is big on thinking big and leading with authority. This is where Donald places his focus and what has helped him to build his empire.

It is surprising that Donald refers to the same topics again and again. The candidates in the series keep doing the same mistakes. Please make sure that you do not repeat your mistakes. Learn from them and improve.

Here is the advice from Donald Trump give in the third series:

• Perseverance – Go ahead and do not give up when things get tough.
• Respect comes from winning – The people around you will respect you more when you show them that you are a winner.
• Lead with authority – When you lead you must have authority
• Never settle – Do not settle for the second best. Push for the best.
• Instinct – Listen to your instinct.
• Shut up and listen – You must listen and value your team’s opinion.
• Play golf – Be social and get to know the people you deal with.
• Go big or go home – Think of big ideas and go for them.
• Sell your ideas – You must be able to successfully sell your ideas.
• Know when to fold – Know when a plan is not working and cut it and move on.
• Let nothing get in the way – When you are moving towards your goal do not let other things distract you.
• Pulling all-nighters – Many times you need to push yourself very hard to achieve you goal.
• Take control – Be in control of the project and not let others wander aimlessly.
• Keep your eyes on the prize – Keep focused on your goal and go after it.

I will follow up in a future post with the advice from series 4. Till then have fun and be a winner.

Follow the practical way,
George Traganidas

Last week I covered the advice that was given by Donald Trump in the first part of the series “The Apprentice”. This advice is covering practical ways that can help people become more successful in business and become better leaders. I think that these are steps that Donald has followed and he lives by. These steps have helped him to build his huge empire and become a billionaire.

The second series continues in a similar style. A new group of people face business challenges every week and hope to work for Donald. The tasks are similar to the first series, but the pressure is more and the deadlines are more aggressive. Donald continues to evaluate the performance of the teams each week and give feedback and advice.

Here are his gems of wisdom from the second series:

• Be quick but be careful – You need to make decisions fast, but you must not be careless.
• Get organized – You need to be organized and move decisively.
• A penny saved is a penny saved – You must be able to control your costs.
• Be respected – You must be able to get the respect of the people you work with and that work for you.
• Price is right – You must price your product correctly for the market you target.
• Know your market – You must know the market that will buy your product.
• Sell your ideas – You must sell your ideas all the time.
• You have to love it – You must love what you are doing.
• Control your contractor – You must control the people who are working for you and make sure that they deliver.
• Believe in yourself – You must have faith in your abilities to succeed.
• Never lose your cool – You must always keep your temper and composure.
• Form your own opinion – You must be able to decide for yourself and not ask for other people’s opinion all the time. You are the one to make the final decision.
• Know your enemy – You must know the person who you will negotiate with.
• Winning is everything – You must focus your energy in winning.

I hope the advice from the first two series starts to paint a clear picture of what you need to be a winner. There is some repetition and that shows the importance of the particular skill.

I will follow up in a future post with the advice from series 3. Till then have fun and be a winner.

Follow the practical way,
George Traganidas

I came across the other day a series called “The Apprentice”. I am not a big fun of reality TV, but a friend recommended that I should watch this, because it is different and full of practical advice on how to succeed and run a business. As you know by now, I am very interested in practical advice and I thought of giving it a go and see what Donald Trump has to share.

I was pleasantly surprised by “The Apprentice”. It is all about business and how to be successful. Each week Donald gives the candidates a business task to complete and then at the end he judges them on how they did and gives his advice on what they did wrong. The tasks range from creating products to marketing to creating and running a business. The advice that Donald gives is great.

In each episode Donald gives a piece of practical advice on how to succeed. I have created a list of all the advice that Donald gave in the first series. Here is the list and my notes:

• Location, location, location – You already know that the location that you choose for a project is key to its success. What you must also focus on is the person who is behind the project and that the person is as important as the location.
• Don’t negotiate with underlings – You need to speak with the boss and not the employees when you are negotiating.
• The art of the deal – You must master the art of striking good deals.
• A deal’s a deal – You must follow through with the deal once it is agreed. This will build you a positive reputation.
• Stand up for yourself – You must stand up and fight for yourself. No one else will do this for you.
• Know what you are up against – You must do your homework, before you start a project.
• God is in the details – You must pay attention to all the details. This can impress your clients and show you are a professional.
• Beggars can’t be choosers – You do not beg to sell your services/product. If the person does not want to buy then walk away.
• You gotta believe – You need to believe in what you are selling.
• Think outside the box – You need to be creative with your ideas.
• It’s easier to think big – You need to think big ideas and implement them. Few people make bold big moves and that will differentiate you from the mass.
• Passion – You must be passionate about what you are doing.
• Dog does not eat dog – You must surround yourself with other great and successful people.

As I said in one of my previous posts you must seek advice from people who are successful in their field and they are active players. Donald passes that test and I believe that his advice is valuable and can lead you to success.

Next week I will talk about the ideas that Donald presents in the second series.

Follow the practical way,
George