5 key investment lessons from world's third richest man

Warren Buffett, one of the world's most successful investors, turns 90 on Sunday. Buffett, the third richest man in the world, has a net worth of $ 86 billion. The chairman and CEO of investment firm Berkshire Hathaway were born in Omaha, Nebraska, United States, on August 30, 1930. Buffett bought his first shares in 1941 at the age of 11. When he was thirteen, he bought a stake in a 40-acre farm in Omaha, Nebraska when he finished high school.

Berkshire Hathaway is currently the fourth largest in the world, with assets valued at $ 819.7 billion, according to Forbes. The billionaire investor of the 1980s has succeeded in ways the most only dream of.

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His best-known advice to investors is: “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1."

Here are five investment lessons from 'Oracle of Omaha'

"Never invest in a business that you cannot understand."

Warren Buffett's golden rule is that you should invest in those businesses you understand. Buffett has always invested in industries he believes in. When the financial situation is uncertain, stick to what you know. You should always be rational and do your homework when looking for a business to invest in.

"Buy stocks the same way you buy a house. Understand and love them so that you are satisfied with owning in the absence of any market."

If you’re not investing, you’re doing it wrong

Holding on to cash is a bad investment. One should not have a large amount of liquidity. Investors should always look for ways to generate returns from existing assets. 

"Today people who have cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, which is an asset that pays next to nothing and is certain to depreciate in value," Buffett said.

Stick to your long term plans

"Someone is sitting in the shade today because someone planted a tree a long time ago," Buffett said. One should always look at long term plans when investing. Buffett's mantra is: "Just buy something that you will be completely happy to carry if the market shut down for 10 years."

As Buffett says, "Decide a business is worth investing in because it was going to last, not because it is doing well right now."

Invest in yourself

The biggest investment lesson one can learn from Warren Buffett is: "The most important investment you can make is in yourself." He is always learning and always dedicates time to personal development even in his 90s.