Everyone knows that Warren Buffett is considered one of the most successful investors in the world! But, people are often curious to know what is the secret of his immense success. If you also want to earn a lot of money in the long run, then these 5 simple but powerful formulas of his can prove to be very useful for you. This can be an important step towards making your financial future golden.

Never stop learning

Warren Buffett says that investing in yourself is the most important. So, learn something new every day, whether it is from books, observation, or the market. He believes that only those people are successful who never stop learning. This is the key to your personal and financial growth.

Understand first, then invest

According to Warren Buffett, investing money in something that you do not understand is the biggest risk. He says don’t trust anyone’s advice, but trust your research and only then invest money somewhere. This will help you save yourself from wrong decisions.

Choose ‘quality’ stocks

Don’t fall for cheap stocks. Often people run after cheap stocks. Warren Buffett says to buy good stocks at the right price, don’t run after cheap stocks. He says only companies with strong foundations give better returns in the long run. This will give stability and high growth potential to your investment.

Don’t run after every opportunity

Many people start running after every opportunity. Warren Buffett believes that one should not say yes to everything. Even if the investment is less, it is important to invest money wisely, this is the key to success. This will help you maintain financial discipline.

Always think for the long-term

Warren Buffett says that keeping stocks forever is his favourite thing. They believe that the magic of compounding will work only if you persist. This is the favourite thing of almost every investor because you get the benefit of compounding only in the long run. This helps your money grow faster.

Also, know the power of compounding

Compounding means compound interest. Under this, you also get interest on the interest of your investment! Due to this, your money grows faster. It has the power to increase your wealth manifold.

Let’s understand with an example

Suppose you deposited ₹ 1 lakh in the first year, on which you got a return of 10 percent i.e. ₹ 10,000. Now next year you will get a return of 10 percent on the entire ₹ 1.10 lakh. In this way, your amount will keep growing with interest and you will keep getting interest on it. This is the power of compounding.

Keep saving

Every month you should save a part of your income. This will help you accumulate extra money. Later you can use this money according to your need. This will strengthen your financial foundation.

Keep track of your expenses

Keep a track of your expenses and control them. Make a budget every month and spend according to it. This will help you stay financially disciplined.

Invest the remaining money in the right way

When there is money left after expenses, invest it. Invest in the right place, so that you get good returns. Do research before investing money anywhere. This will help in making your investment safe and profitable