Investing is both: super simple and extremely complicated. We have picked out 10 investing quotes, that everyone should at least have heard of. Those are from famous investors as well as unknown quotes.
First, let’s have a quick look about the quotes we have picked and then dig deeper into the meaning of each quote:
- “Investing should be taught in every school and university – and by history and psychology teachers and professors.”
- “Risk comes from not knowing what you’re doing.” – Warren Buffett
- “Checking your portfolio daily is like setting up a webcam in the forest to see if the trees are growing.”
- “If we buy the business as a business and not as a stock speculation, then it becomes personal. I want it to be personal.” – Phil Town
- “Ninety-six percent of Warren Buffett’s net worth was accumulated after his 65th birthday. That’s how compound interest works.”
- “It is impossible to produce superior performance unless you do something different from the majority.” – John Templeton
- “When someone says they want to be a millionaire, it usually means they want to spend a million dollars. That’s literally the opposite of being a millionaire.”
- “Behind every stock is a company. Find out what it’s doing.” – Peter Lynch
- “Start small. $10 a month. Buy an index ETF. Up the ante. $50 a month. Then $100. Eventually, more. Buy a few stocks. Hold them for years. Market drops? Buy more. Big headlines? Ignore them. Invest every month.”
- “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” – Albert Einstein
“Investing should be taught in every school and university – and by history and psychology teachers and professors.”
Everything you need to know about investing is very simple to learn. You don’t have to have excellent mathematical skills or know every company in detail. Balance sheets are not important for the average joe investor. Simple maths is enough to get successful in the stock markets.
In the end, other things make the difference. In particular, how you keep your emotions under control when the entire market falls into panic or sky-high euphoria. The only way how you can manage these situations is if you understand your emotions and you can keep them under control.
Knowing history can help you understand the potential future. All great investors (no matter if Warren Buffet, Jim Rogers, etc.) have good knowledge about market history. They keep calm once markets crash and don’t hype once the markets are high.
“Risk comes from not knowing what you’re doing.” – Warren Buffett
Risk is an inherent part of life and is often associated with uncertainty and the unknown. When it comes to financial decision-making, risk can arise when an individual or organization does not have a clear understanding of the potential consequences of its actions. In this context, the statement “risk comes from not knowing what you’re doing” highlights the importance of having a thorough understanding of the situation at hand in order to make informed and strategic decisions. Without knowledge and understanding, the potential for mistakes and negative outcomes increases, resulting in increased risk. Therefore, it is essential to take the time to educate oneself and carefully consider the potential risks and rewards before making any important financial decisions.
“Checking your portfolio daily is like setting up a webcam in the forest to see if the trees are growing.”
This is a metaphor that compares the growth of an investment portfolio to the growth of a forest. Just as trees in a forest take time to grow and change, investments in a portfolio take time to mature and generate returns. Checking a portfolio daily is therefore akin to setting up a webcam to constantly monitor the growth of the trees in a forest – it is a futile and unnecessary endeavor, as the changes that occur on a daily basis are likely to be minimal. Instead, it is more effective to monitor and manage a portfolio on a longer-term basis, allowing time for investments to grow and mature.
“If we buy the business as a business and not as a stock speculation, then it becomes personal. I want it to be personal.” – Phil Town
The statement suggests that the speaker believes that there is a difference between buying a business for the purpose of making a profit through buying and selling stocks, and buying a business with the intention of actively running and growing it. In the latter case, the decision to purchase the business is driven by a personal desire to be involved in the day-to-day operations and success of the company. This approach can lead to a greater sense of ownership and responsibility, as well as a more personal investment in the business. As a result, the speaker wants the decision to buy the business to be a personal one, rather than simply a financial speculation.
“Ninety-six percent of Warren Buffett’s net worth was accumulated after his 65th birthday. That’s how compound interest works.”
This highlights the power of compound interest, which is the interest that is earned on both the original principal and the accumulated interest of an investment over time. This means that the longer an investment is held, the greater the potential for growth, as the interest earned in each period is added to the principal and begins to earn interest in the following period. In the case of Warren Buffett, the statement suggests that the majority of his net worth was accumulated later in life, likely due to the compounding effect of his investments over time. This serves as a reminder of the importance of starting to invest early and allowing time for compound interest to work its magic.
“It is impossible to produce superior performance unless you do something different from the majority.” – John Templeton
In order to outperform the average or typical performance of a group, an individual, or an organization John Templeton suggests that you must take a different approach or make different choices than the majority of your peers. This idea is rooted in the concept of the wisdom of crowds, which posits that the collective judgment of a group is often more accurate and reliable than the judgment of any single individual within that group. Therefore, to achieve superior performance, it is necessary to deviate from the norm and do something that sets you apart from the rest of the group. This could involve taking on more risk, pursuing a unique strategy, or making bold decisions that differentiate you from your competitors.
“When someone says they want to be a millionaire, it usually means they want to spend a million dollars. That’s literally the opposite of being a millionaire.”
This highlights a common misunderstanding about the nature of wealth and the meaning of being a millionaire. A millionaire is someone who has a net worth of at least one million dollars, which means they have assets that are worth at least that much. However, the desire to “be a millionaire” is often associated with the desire to have a lavish lifestyle and spend money freely, without regard for the need to save and invest in order to build wealth. This approach is the opposite of what being a millionaire actually entails, as it involves spending rather than accumulating wealth. Therefore, the statement suggests that many people misunderstand what it means to be a millionaire and the actions that are necessary to achieve that status.
“Behind every stock is a company. Find out what it’s doing.” – Peter Lynch
Peter Lynch highlights the importance of understanding the underlying business behind a stock investment. When an individual or organization buys a stock, they are essentially buying a small ownership stake in the company that issued the stock. Therefore, it is important to thoroughly research and evaluate the company in order to make an informed investment decision. This involves looking at a variety of factors, such as the company’s financial performance, management team, competitive landscape, and growth prospects. By gaining a deep understanding of the company and its operations, investors can make more strategic and confident decisions about whether to buy or sell the stock.
“Start small. $10 a month. Buy an index ETF. Up the ante. $50 a month. Then $100. Eventually, more. Buy a few stocks. Hold them for years. Market drops? Buy more. Big headlines? Ignore them. Invest every month.”
This approach provides a step-by-step approach to building wealth through investing. The idea is to start with a small amount of money and invest it in a low-cost index exchange-traded fund (ETF), which provides broad exposure to the stock market. As you become more comfortable and confident with investing, you can gradually increase the amount of money you invest each month, eventually buying individual stocks and holding them for the long term. During market downturns, the advice is to continue investing and even consider buying more, as this can provide an opportunity to buy stocks at a discount. Finally, the statement emphasizes the importance of ignoring the headlines and making regular, consistent investments, regardless of market conditions.
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” – Albert Einstein
This quote is often attributed to Albert Einstein, although it is unclear whether he actually said it. The quote highlights the incredible power of compound interest, which is the interest that is earned on both the original principal and the accumulated interest of an investment over time. This means that the longer an investment is held, the greater the potential for growth, as the interest earned in each period is added to the principal and begins to earn interest in the following period. Therefore, those who understand and take advantage of compound interest can earn significant returns on their investments, while those who do not understand it may end up paying more in interest than they earn on their investments.
Conclusion about our 10 investing quotes
In conclusion, these 10 quotes are all related to financial literacy and investing. The statements provide information about a variety of topics, including the importance of understanding risk and the underlying business behind a stock investment, the power of compound interest, and the need to take a different approach in order to achieve superior performance. Overall, these 10 investing quotes emphasized the importance of education and knowledge in the realm of personal finance and investing, and provided actionable advice for those looking to grow their wealth and achieve financial success.
