Hand-picked quotes about investment from the best non-fiction books

Poverty is simply having more problems than solutions. Poverty is caused by a person’s being overwhelmed by problems he or she can’t solve.

We all do crazy stuff with money, because we’re all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.

Bubbles form when the momentum of short-term returns attracts enough money that the makeup of investors shifts from mostly long term to mostly short term.

There are trillions of ways to make more money because there are trillions of, if not infinite, problems to solve.

Ultimately, it is not the asset that makes you rich. Information makes you rich... or poor.

By the time a person hears a hot tip about a company’s new product or news that a company is in trouble, people on the inside and close to the inside have already traded on that information. The battle has already been won, and the average investor has lost.

Since I know a trend can reverse and change direction, I do not blindly invest for the long term. The Information Age is about change and I need to be flexible... not a robot.

In the Information Age, information alone can make you very rich.

Studying a specific person can be dangerous because we tend to study extreme examples—the billionaires, the CEOs, or the massive failures that dominate the news—and extreme examples are often the least applicable to other situations, given their complexity.

The key is to realize that the process of solving those problems makes you rich. And once you start solving not only your own problems, but others’ as well, then the sky is the limit.

It should surprise no one that many of us are bad at saving and investing for retirement. We’re not crazy. We’re all just newbies.

My personal philosophy is that it is easier to change myself than to change the system. In other words, I am not a person who battles the winds that drive windmills.

I consider myself successful by the amount of money I make. The freedom that comes with that. And the experiences I'm living every day.

The new capitalism puts millions of workers’ money into investments that allow them very little control or leverage.

There is no reason to risk what you have and need for what you don’t have and don’t need.

If a VC makes 50 investments they likely expect half of them to fail, 10 to do pretty well, and one or two to be bonanzas that drive 100% of the fund’s returns.

The more problems you solve, the richer you will become.

I simply want to know the rules and play by the rules. This does not mean I believe the rules are fair or equitable. They aren’t.

A bureaucrat’s job is to get their hands deeper in your pockets—legally—and your job is to have them take as little as possible—legally.

“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune.

Investors often innocently take cues from other investors who are playing a different game than they are.

Warren Buffett is a phenomenal investor. But you miss a key point if you attach all of his success to investing acumen. The real key to his success is that he’s been a phenomenal investor for three quarters of a century. Had he started investing in his 30s and retired in his 60s, few people would have ever heard of him.

Just because you invest or are self-employed, does not mean you are an investor or a business owner.

Entrepreneurs have two characteristics... ignorance and courage.

There’s only one way to stay wealthy: some combination of frugality and paranoia. Getting money is one thing. Keeping it is another.

Most of the middle class’s financial priorities are: Priority #1: Get a high-paying job. Priority #2: Make the mortgage and car payments. Priority #3: Pay bills on time. Priority #4: Save, tithe, and invest. Priority #4 should come first.

A financially intelligent person does not want a big paycheck. A financially educated person would rather be paid royalties or dividends because taxes are lower on these types of income. A knowledgeable investor at least knows enough to invest for portfolio or passive income.

Inside every problem is a gem of wisdom, a gem that makes us smarter, stronger, and able to do better regardless of economic conditions.

In the world of money, there are two things investors invest for: capital gains and cash flow. In most cases, investing for capital gains is gambling, or speculation.

Many people get into trouble simply because they do not know the rules, ignore the rules, or break the rules. Know the rules!

A true capitalist is simply someone who recognizes a problem and creates a product or service to address that problem.

When it comes to the game of money, most people are playing—if they know they are playing at all—not to lose rather than playing to win.

The reason you do not count your money while you’re sitting at the table is because as long as you are at the table, your money does not belong to you. The moment you step away from the table, the money in your pocket is your money and you can count it.

Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when compounding runs wild.

More than I want big returns, I want to be financially unbreakable. And if I’m unbreakable I actually think I’ll get the biggest returns, because I’ll be able to stick around long enough for compounding to work wonders.

There are books on economic cycles, trading strategies, and sector bets. But the most powerful and important book should be called Shut Up And Wait. It’s just one page with a long-term chart of economic growth.

Successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them in real time.

If you want to be rich, become a customer of businesses that are dedicated to making you richer. For example, I am a long-term customer of a number of investment newsletters and financial magazines.

This new capitalism is based upon feel-good economics. As long as a person’s net worth is going up, the illusion of prosperity, based upon debt, not production, continues. Who needs freedom when you’ve got things?

A smart investor knows the difference between facts and opinions. Generally a person who invests for capital gains is investing on an opinion. A cash flow investor invests for facts. If possible, a smart investor will invest using both opinion and facts, and invest for both cash flow and capital gains.

Intelligence is the ability to take information and make it meaningful.

Offer feedback or advice only if it’s asked for. Nothing infuriates people more than feedback they did not ask for... even if it’s feedback they know they need. As that ancient bit of wisdom goes, “Don’t teach pigs to sing. It wastes your time and it annoys the pig.”

Capitalists believe in producing a better product for a better price.

Being able to live well and still invest no matter how much you make requires a high level of financial intelligence.

There is little correlation between investment effort and investment results.

People make financial decisions they regret, and they often do so with scarce information and without logic. But the decisions made sense to them when they were made.

Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

The problem is, after paying their expenses, most people don’t have any money left to do save/invest. The reason is because they consider saving, tithing, and investing as a last priority.

The reason most financial advisors say that higher returns mean higher risk is simply because they sell only investments that allow very little control.

Professional investors don’t diversify. As Warren Buffett says, “Diversification is a protection against ignorance. Diversification is not required if a person knows what they are doing.”

Exercise is like being rich. You think, “I did the work and I now deserve to treat myself to a big meal.” Wealth is turning down that treat meal and actually burning net calories. It’s hard, and requires self-control. But it creates a gap between what you could do and what you choose to do that accrues to you over time.

The value of my apartment house is based upon the rent my tenants pay. In other words, the true value of the property is the value my tenants think the property is worth. If I can increase the perceived value of my property to my tenants, I, not the market, have increased the value of the property.

Golf is not my game. Golf is what I do for fun. Business, investing, and making money is my game. I love my game.

In this new age, information enabled the coordination of resources at a much quicker and higher level than ever before. It is this coordination that creates the super-rich.

The definition of leverage is doing more with less. A person who puts money in the bank, for example, has no leverage.

If you want to become richer, it is important to continually upgrade your environment. This does not mean running out and buying a big house, flashy cars, new clothes, and getting into piles of bad debt. What I mean is to consciously and intelligently challenge yourself to improve your standard of living by increasing your financial intelligence.

Do you know how hard it is to maintain a long-term outlook when stocks are collapsing?

“It’s not that I want money. It’s the fun of making money and watching it grow.”

The problem with arguing with an idiot is that there are soon two idiots: you and the person you’re arguing with.

Some of the appreciated value of a house is due to the decline in value of the dollar. In other words, the house is not going up in value. It just takes more dollars to buy the same house because the government and central banks keep injecting more funny money into the system to keep the economy afloat.

Have the courage to be open to feedback. If you want to improve, seek more feedback. This is why coaches and mentors are important to successful people. Successful people seek more feedback.

«People having control over their time tend to be happier in life» is a broad and common enough observation that you can do something with it.

“The only way to win in a Las Vegas casino is to exit as soon as you enter.” That’s exactly how the game of trying to keep up with other people’s wealth works, too.

A healthy environment is one that offers feedback. Life is constantly giving you priceless information if you are willing to receive it, and most of the time the feedback is free. Every time you open your pay envelope and see how much is lost to taxes, this is feedback. If your creditors are calling, demanding payment, this is feedback. If you are working harder and not earning enough, this is feedback.

If a government agency is efficient and saves money, the agency is punished, instead of rewarded, by having next year’s budget reduced. To avoid this, most government agencies spend all their budgeted money, even if they do not need to. This means costs keep going up and the chances of a government budget surplus are slim to none.

There has been too much greed, misinformation, and corruption running our businesses, governments, and schools.

Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast.

The difficulty in identifying what is luck, what is skill, and what is risk is one of the biggest problems we face when trying to learn about the best way to manage money.

History is mostly the study of surprising events. But it is often used by investors and economists as an unassailable guide to the future.

Everyone agrees that we need to share the wealth, as long as it is your wealth, not their wealth.

But life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.

Two of the main reasons I do not like mutual funds is that banks do not lend money on them and insurance companies will not sell me insurance against catastrophic loss if the market crashes—and all markets crash.

The idea is that you have to take risk to get ahead, but no risk that can wipe you out is ever worth taking. The odds are in your favor when playing Russian roulette. But the downside is not worth the potential upside. There is no margin of safety that can compensate for the risk.

In the Information Age, knowledge is the ultimate leverage. Information is the single greatest asset of this era.

Investing for cash flow is investing for income. If I put savings in the bank and receive 5 percent in interest, I am investing for cash flow.

Government bureaucracies are designed to operate on a budget deficit. A budget surplus is an expense.

When more money does not solve a problem they create new taxes with clever names. Since the problems only get bigger, the percentage we pay in taxes only goes up.

The problem with letting bureaucrats and bankers manage your money is they think your money is their money.

Focus less on specific individuals and case studies and more on broad patterns. You’ll get closer to actionable takeaways by looking for broad patterns of success and failure. The more common the pattern, the more applicable it might be to your life.

How you behaved as an investor during a few months in late 2008 and early 2009 will likely have more impact on your lifetime returns than everything you did from 2000 to 2008.