Are you looking for one of the best investing books ever written? If so, then you need to read The Snowball. This is one of the most motivating and informative books about stocks that I’ve ever read.
If you want book that’s sure to get you charged up and motivated, this is for you. Seriously, each page makes you more and more excited about building your own personal fortune.
Alright, enough with the gushing. I’ll quickly explain what The Snowball is about, and then we’ll look at some detailed lessons from the book.
The Snowball tells the true life story of Warren Buffett. Even if you know absolutely nothing about stocks on investing, you’ve certainly heard of Buffett. He’s the most famous investor of all time, and one of the richest people on Earth.
This book chronicles Buffett’s rise to riches and also shares the most important strategies and lessons he learned along the way. While the whole book is fantastic, the first half is especially interesting and important for newer or intermediate investors. Why? Because it shares several excellent techniques which can really help you out.
Let’s examine three of these together.
1. Start Building Wealth Now!
You don’t need millions of dollars in capital to start generating passive income.
One of the earliest, and most important, lessons The Snowball teaches is that Warren Buffett started making money “hands-free” at a very young age. He’d do things like buying pinball machines, putting them in barbershops, and then splitting his revenue with the building’s owner.
In the 21st Century pinball machines probably aren’t the best business, but you can still use these same principles to build your own passive income streams.
Starting a YouTube channel or creating your own website is a fantastic way to earn extra money while you sleep, and these are definitely ventures a young Warren Buffett would do if he were born today.
Creating wealth is often easier than you’d think. And you already have tools and options available to you at any income level.
2. Learn To Evaluate Small Stocks And Look For Value In Unseen Assets
Warren Buffet once famously claimed that he could easily gain 50% annual stock market returns, if he was managing a portfolio under $1 million.
That sounds completely unbelievable, until you read The Snowball and realize that Buffett has done something similar in the past.
Better yet, The Snowball details how Buffett did this, showing his exact process for finding hidden gems and milking a big profit from these cash cows. Without getting too technical right now, this process involves looking at boring or overlooked assets.
Many of Buffett’s big winners were investments into commodity based businesses or companies which supplied simple services.
Even today, this strategy works. You can easily find and evaluate companies like Archer-Daniels Midland or Weyerhaeuser when they’re undervalued and everyone else is looking towards Tesla or Netflix.
Boring, low-priced stocks with a good track record and solid fundamentals provide excellent returns. Seek these out and you’ll beat the market like Warren Buffett.
3. Develop A Financial Cushion And Your Career Feels Like Retirement
Warren Buffett retired at age 26 and has never worked since. This might sound weird since Buffett is still running his company and constantly in the news, so I’ll explain.
In his early 20’s, Buffett moved to New York and worked at an investment firm there. While he enjoyed his job, he didn’t like the long commutes or how different the city was from his hometown of Omaha, Nebraska.
Through careful investments and budgeting, Warren Buffett saved up 10 times his annual expenses by age 26. Then he quit his job and moved back to the place he loved best.
Since then, he’s never had to work for money. Anything he does is done because he enjoys it.
I think this is a great mindset to have and very inspirational. When most people think of money, they imagine using it for flashy cars or expensive clothes. Nothing wrong with those purchases, but using wealth to build the life you want is far more important. And The Snowball does an excellent job illustrating why,
Final Thoughts
The Snowball is a fantastic read and belongs on every investor’s bookshelf. This is a title which dives deep into the life and achievements of one of history’s richest men, examining exactly how he built his wealth.
If you’re a new investor (or even starting to master the basics of personal finance) give this book a read. And if you’re more advanced or experienced, you’re going to get a lot from Buffett’s stock strategies and insights. Heck, even the super wealthy should invest a few hours into reading this book, just to better understand what qualities to look for in a money manager or hedge fund.
I can’t recommend this book enough and highly encourage you to check it out.
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