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Few of the Warren Buffett's principles you can use in financial planning

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Warren Buffett's principles and simple advices concerning the art of investing if followed can yield substantial returns for investors over a time frame. So, in order that you make lucrative investment bets here are put forth some of his priceless guidelines:

Few of the Warren Buffett's principles you can use in financial planning
 

1. Save before spending: To accumulate wealth over a time frame, it is crucial for an investor to first set aside some funds out of his total cash inflow towards savings.

The funds earmarked for savings could be in the range of 10-25% and the balance amount can then be used to meet other financial responsibilities at hand.

Nonetheless, it should never be the other way round (i.e. spend first and make investments with the balance amount left) as the plan then fails to meet long-term financial goals.

2. Splurging on unnecessary items can result in awful times: As the ace investor remarks "If you buy things you don't need, you will soon sell things you need". So shun expenditure on unwanted items and spend only on things that you actually need.

3. Investments made today shall yield returns for the next generation: Any investment

decision made today shall yield returns for our next-gen same as we are reaping the benefits of

our parents' investments and savings.

4. Instead of holding loss-making investments consider offloading funds into better investment avenues: As witnessed in today's investment climate, investors continue to hold loss-making investments so as to reduce the extent of losses.

However, in such a case the investor will be better off by reviewing his financial situation and re-balancing overall investment portfolio by including assets that are likely to yield higher returns.

5. Financial security and wealth accumulation needs practice of basic investing techniques: For attaining financial security over time, you as a common investor needs to abide by some basic investment techniques, including portfolio diversification and systematic investment planning among others.

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