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10 Rules for successful investing by Charlies Munger

Charlies Munger's 10 Rules For Successful Investing:

1. Live Below Your Means - Munger notes that its very important to spend less than your income, especially when you are starting your career. Invest the excess funds wisely. Munger said that the hard thing to do is to accumulate your first $100,000 and the first million is the next big hurdle.
2. Understand Your Risk Tolerance - Every Investor needs to know the level of risk that they can take. Losses are ineviable and investors must follow an investment strategy that fits their risk tolerance.
3. Research Opportunities - Investors must be able to process the vast amount of information and learn how to evaluate the risk and rewards of potential investments.
4. Invest For The Long-Term - Volatility has never been a big concern to Munger, instead it should be welcome by long-term investors, since it creates the opportunity to increase your investments at lower prices in the short-term. Invest for the long-term and compounding will do the rest.
5. Funds Are No Substitute - Investors are oversold on the benefits they receive from money managers. Total return from Wall Street money managers are eaten up by transaction costs, taxes, and fees.
6. Patience, Coupled With Decisive Action - Excellent investment opportunities are few and far in between. Investors must continually search and evaluate investment opportunities. You have patience when looking for investment opportunities since you will reject 99 out of 100 opportunities that cross your desk. When a great opportunity crosses your desk, act decisively, and don't waste time overthinking it.
7. Tax Planning - Taxes and tax planning play a major role in wealth accumunation.
8. Love The Process - You must love the evaluation and investment process since it requires a lot of work.
9. Pay A Reasonable Price - While value is important, investors should buy good businesses that are in sectors that exhibits favorable economic conditions. Good businesses will grow in value over time.
10. Choose Good Partners - Every investor relies on advice from others when making investment decisions whether they are investment advisors, brokers, newsletters, friends, or business partners.

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Disclaimer � The Above view is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers.