Warren Buffett's Advice: How to Get 'Fair Shake' on Wall Street

During his live appearance on CNBC's "Squawk Box" today, Berkshire Hathaway Chairman Warren Buffett had some valuable advice for individual investors on how to make sure they are getting a "fair shake" on Wall Street.

BECKY QUICK: Do you think, and I ask this because there have been so many scandals that people think about, Libor, and they think about a lot of the deals behind the scenes that have been dragged out. A lot of Main Street investors think they can't get a fair shake on Wall Street. Can they?

WARREN BUFFETT: Well, they pay a lot of expenses in many cases. They don't need to. They should buy a low-cost index fund and they can participate in the growth of America over the next 20 or 30 or 40 years and they'll do fine. But if they're paying high fees to achieve that same result, they're going to get hurt. They should look very carefully at costs. But they should hold a diversified group of really high-class companies, which you can do by buying an index fund. And then they should forget it. They should just pretend the stock market closes for five years and they shouldn't look at prices every day...

The people selling you securities are often selling you things they make a lot of money in. The first question you should ask of anybody selling you securities is, 'How are you getting paid and how much are you getting paid?' The truth is you can own index funds with a very, very low cost and you will end up getting the same performance that you get from people who charge you a lot more.

So, you always want to look at costs. When somebody comes around to you and says, 'I'm going to sell you this wonderful security but there's this big chunk in it for me," you get suspicious.

(Read More: Buffett Still Buying Stocks, Sees 'Good Value')

As they say, when a person with experience meets a person with money, the person with the money gets the experience and the person with the experience gets the money.

(Read More: You Tweet, Buffett Answers)

From cnbc.com

Three Simple Retirement Planning Guide

Best Time to Start

Now is as a good time as any. The earlier you start, the bigger the nest egg you’ll have on retirement. But as we know, it is difficult to start in our twenties, as at that age we save for a car and then a house. And soon after, there will be educational expenses for kids.

But you cannot afford to keep postponing your financial planning for retirement. In order to have sufficient income to cover all those non-working years, you cannot leave the plan to the very last moment. If you decide to retire at 55, you need a nest egg that can generate an income for another 25 to 35 years.

Three Simple Retirement Planning Guide

The amount you need to save will depend on the retirement lifestyle you have in mind and the income that you are earning currently. There are three steps in retirement planning guide,

Step One: What’s your monthly retirement income?

First decide how much you think you will need every month to retire comfortably. For example, you may think that if you were to retire today you would need $2,500 per month. But you are only 45 years old and your retirement is still another 20 years away. Because of inflation, you will need more than $2,500 a month in 20 years time to spend on the same things you are used today. 

Assuming an average inflation rate of four per cent per annum, you will need $5,477 per month in 20 years time, so that you still have the same purchasing power as $2,500 today. The higher the rate of inflation, the greater the sum needed per month to give you the same purchasing power as today.

Step Two: Required lump sum

From previous assumption of four per cent inflation rate, you will need $5,477 per month or $65,733 per year. The next stage is to calculate the lump sum required to generate $65,733 for the rest of your life. The interest or return on your investment will determine the lump sum required to earn you a regular income of $65,733 a year.

The higher the rate of return, the smaller lump sum needed and vice versa. For example, if the average interest on your investment is 10 per cent per annum, then the lump sum needed to generate that income is $657,337. But if you managed to find investment with 20% potential return, $328,668 is enough for your retirement planning.

Step Three: How much to save?

Along the way, let say you can earn ten per cent interest per annum, you will have to save $11,128 a year or $927 every month for 20 years to get lump sum of $657,337. How do I get that? You can derive the annual or monthly savings required by multiplying the lump sum figure with the respective figure in the table. In my case, I multiply $657,337 with 0.01693.

However, if the rate of return or your interest earnings is 15 per cent per annum, then you would only need to save $5129 a year. Same if you start a bit earlier, you only need to save $5826 a year for ten per cent interest rate but 25 years of savings. 

Some Precaution Though

With retirement planning, you are looking into the future. So you will be making a lot of assumptions. Though how much you need to save depends on the assumptions made, working through the three steps will give you some better picture of what is expected and whether you are on the right track to a retirement lifestyle that you want.

From stock-investment-made-easy.com

Related Books

How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor

Can I Retire?: How Much Money You Need to Retire and How to Manage Your Retirement Savings, Explained in 100 Pages or Less

You Think $1 Billion Was Expensive For Instagram? They Originally Asked For $2 Billion

Facebook raised a lot of eyebrows when it bought Instagram for $1 billion last week.

But that's actually a bargain compared with Instagram CEO Kevin Systrom's original asking price of $2 billion.

That spectacular number appears in Wall Street Journal, which this evening ran down the details of the intense negotiations between Systrom and Facebook CEO Mark Zuckerberg.

Zuck apparently phoned Systrom on Thursday, April 5, after talking to Facebook COO Sheryl Sandberg and telling her he wanted to buy the company. He reached out directly because he was afraid that going through lawyers, as is normally done with big M&A deals, would have turned Systrom off.

Systrom drove from his home in San Francisco to Zuckerberg's house in Palo Alto repeatedly over the next three days, hammering out a deal. Zuck only told the board of directors about it on Sunday, April 8.

Read more: businessinsider.com

Opportunities around you, grab It

Opportunities above the risk, rather than risk above opportunities

In Australia, there is a famous bakery called the Old Style Bread Center. One day, an employee resigned and opened his own shop name Bakers Delight. During that period supermarket has force many bakeries shut down, but Roger Gillespie, the employee that resign, open stores with the ideas products fresh from the oven. As the result, the tradition idea get good response and Bakers Delight outlets are now mushrooming in the country kangaroo.

So if you know Facebook, Dell and Bakers Delight please explored how Mark Zuckerberg built Facebook, how Michael Dell built Dell Inc  and how Roger Gillespie expand Bakers Delight in which the products at first already exists on the market, then what do you doubt to build a business? Opportunity is all around you, go and grab it, because think a thousand times to do business is not better than one practice. Do not always calculate the risk of doing business. You may not always be lucky, sometimes will also face losing, but we must always "learn how to win, learn how to lose". Uncertainty is something that we can not avoid doing business, but the most important thing is the resilience and maturity of experience, and always willing to learn from mistakes, and always learn from the market.

Businesses need a recklessness, because you are definitely not Frederick Smith who inherited $4 Million when just returned from military service in Vietnam. With the money that legacy, Smith practiced his idea to establish a firm delivery goods quickly, even overnight, to various destinations named Federal Express. There were only two possibilities can occur either loss of heritage or success. It turned out, five years later his wealth become $2.1 Billion. 

Recklessness is what's hard, often heard my friends said a lot of theorizes, read thousands of books, master the world famous matrices, but do not have the boldness to practice. They mostly put risk above the opportunity. 

For a legacy much like a Smith, be thankful for having the ability and possibility to build a business Federal Express instead of some of us with nothing but recklessness. However, know that the recklessness is precisely our greatest capital in starting a business. Always practiced, rather than thinking, opportunities always around you. To be success, start action differently.

How to Become a Money Magnet

I found this article quite interesting so I want to share with my reader. We all also hope to become money magnet however how to achieve it is one of the secret which rich know but you don't know.

Do you intend to become an irresistible MONEY MAGNET?

Then, get busy activating the universal LAW OF ATTRACTION

Here are some steps you can take right away.

1. Eliminate from your mind any beliefs in lack of money

2. Eliminate from your mind the belief that "it is hard to make money"

3. Eliminate from your mind the belief that it is only possible to make money through a hard, painful, limiting job

4. Eliminate from your mind any belief in debt. This insidious belief will keep you in debt

5. Eliminate from your mind any belief in LOSS. This destructive belief will make you lose what little you may have

6. Eliminate from your mind limiting thoughts such as "It is too expensive", "I cannot afford it", "There is never enough", "I never have enough"

7. Open your mind to receive money from any source and any direction, even in the most unexpected ways

8. Start to appreciate, love and even bless whatever amount of money you now have. Say to yourself "Money is good. Money is wonderful. I love money and money loves me". This will signal your mind and the universe to send you even more money

9. Eliminate from your mind any resentment, condemnation or criticism of rich people. These thoughts will keep money away from you

10. Appreciate all the wealth and riches surrounding you. Appreciate the riches and wealth of others. Use the HUNA technique and whenever you see something you desire for yourself bless it and also bless its owner.

11. Always be thankful and grateful for whatever money you have. These attitudes will attract more money into your life and multiply it

12. Appreciate and even bless every dollar bill (of any denomination) or any coins you come in contact with

13. Love yourself and always put yourself first.

14. Remember to always pay yourself first. Pay your creditors AFTER you have paid yourself. This behavior will send a clear signal to your Subconscious mind and the entire universe that you always come first and that you deserve wealth

15. Believe you were born to win, you were born to be rich and that you deserve to be wealthy simply because you were born on this planet. That's reason enough for you to have wealth

16. Take some time during the day and imagine how you will use the wealth you have. In your imagination, buy that house, that car, those things you desire. Let go of the thought that "I cannot afford it"

17. Instead of worrying about any money problems, do your best to WORRY about all the money coming your way and how in the world you are going to spend it to make you and others happy. Really WORRY about it

18. Do your best to start ACTING AS IF you are already rich, a millionaire. Constantly ask yourself "How/what would a millionaire think or speak in this situation?" Then, think and speak from that millionaire mindset.

19. Constantly keep telling yourself over and over that "It is real easy for me to make money, as much money as I desire"

20. Keep telling yourself over and over every single day that "I am a money magnet. I attract money like a magnet. I attract money quickly, easily, effortlessly and having fun. Money is now coming to me from every source and every direction in avalanches of abundance."

21. The Subconscious responds very well to very exact amounts of money. Therefore, set a definite amount of money you want to attract into your life. Keep telling yourself over and over that you are attracting that

amount quickly, easily, effortlessly and having FUN!

As you practice the steps mentioned above, your MONEY BLUEPRINT will change and you will start attracting more and more money into your life -- the EASY way.

Copyright (c) 2007 by Leo Foster. All rights reserved.

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From selfgrowth.com