6 priceless investing lessons from influential billionaires

There are 2,640 billionaires globally, with a total net worth of $12.2 trillion, according to the 37th annual Forbes list published in 2023.

And Australia is home to 139 of them.

The thing is, each of these billionaires - whether they rocketed to success due to property, the stock market, business or even mining - is all involved in some form of investing.

And there is a lot that we can learn from their experience.

Here, I’ve put together 6 priceless investment lessons from some of the world's most successful billionaires.

After all, these titans of industry have not only built immense wealth but have also mastered the art of sustaining it through savvy, strategic decisions.

1. Always think long term

The lesson: Go for long-term, stable investments over short-term, risky investments 

Warren Buffet, multi-billionaire and most successful investor of all time, has a whole suite of both investment and life lessons for anyone wanting to better themselves.

“Someone is sitting in the shade today, because someone planted a tree a long time ago,”

is among one of his most famous quotes, and it forms a foundational pillar of his long-term investment ethos.

His point here is that in life, and with investing, you have to think about the grand trajectory of things.

After all, a tree takes time to grow; it doesn’t happen overnight.

And investments are the same.

Start thinking about your long-term plan today.

Start early, be patient and let your money grow.

The average Australian thinks about what's going to happen this weekend, most investors worry about what's going to happen in six months' time… but very successful investors are thinking 10-20 years into the future.

Sure there are plenty of people online who will offer up their secrets to getting rich quick, but investing isn’t a get-rich-quick scheme.

In fact, short-term thinking is dangerous and can lead you to make the wrong decisions at the wrong time.

No one knows what the market will do in the short-term, so if you have a short-term goal driving your decision-making it could prompt you to buy in the wrong place, with the wrong strategy or when the market is already booming.

In the fast-paced world of property investments, it's often easy to get caught up in the immediate challenges and setbacks.

The fluctuating market, the occasional bad tenant, the slight miscalculation in property value; increased government interference - these hurdles can be incredibly discouraging when we're observing them through a microscope.

However, the true property maestro understands the art of zooming out and perceiving the bigger picture.

Once you adopt the habit of thinking in decades rather than months, everything becomes easier and goals are more achievable.

So the key is to make sure you see beyond the immediate hurdles and understand that with patience and persistence, the property landscape is one of vast opportunity.

Zoom out, think long, and let time work in your favour.

Buffet also says:

“ If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes”.

And I agree.

Property investing is a marathon, not a sprint - you won’t see results overnight so don’t get discouraged when things don’t move as quickly as you’d like.

Stay the course and keep investing over the long term.

2. Make mistakes (In a Good Way)

The lesson: Mistakes can help you succeed 

Ingvar Kamprad, Founder of IKEA, once said:

“Only those who are asleep make no mistakes.” 

And the infamous Bill Gates has been quoted saying something similar:

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” 

The key message?

Truly successful people are good at failing.

In fact, I’ve often said I’m a real success at failure.

The problem is, if you let a fear of failure hold you back, or worse, knock you off your investment path, you’ll never really achieve success.

But, rather than seeing it as a negative thing, successful people realise that you can use your mistakes to learn and grow.

They’re not afraid of making mistakes, so you shouldn’t do either - life is too short to let fear make big decisions for you.

3. Do what everybody else isn’t doing

The lesson: Never make an investment, just because everyone else is doing it or just because someone told you to. Do your research and make wise investment choices.

“Ignore the conventional wisdom. If everybody else is doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction,” said Sam Walton, Founder of Walmart.

This piece of billionaire advice fits with the one about making mistakes that I mentioned above.

It’s a fact that most property investors fail - 50% sell up in the first five years and 92% never get past their first or second property.

Australia is full of unsuccessful investors… so stand out from the crowd, and don’t get caught following the herd.

Because the herd is probably not on the right path or looking to achieve success in the right way.

As the saying goes, if you listen to who everyone else listens to, you're likely to get the same results as everybody else.

In other words, if everyone is doing it, you should (at a minimum) be sceptical.

After all, if everyone was doing it right, wouldn’t we all be billionaires?

Think of those who bought in mining towns during the mining boom or those who bought off-the-plan apartments around a decade ago during the high-rise boom in the middle naughties.

What about those who bought regional properties for cash flow or those who bought cheap commercial properties because it sounded like a good idea?

Did any of these become successful investors or achieve financial freedom as a result of their investment decisions?

No.

They followed the herd, and as always… the herd failed.

As the wise Warren Buffet also says:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

This is why it always pays to have a well-thought-out investment plan in place.

And regular updates to ensure you’re on track, or possibly even a look at whether you need to rejig that plan.

Only follow the right advice to suit your investment plan, from an expert who knows what they’re talking about.

Do your research and make the best decision to suit you… and worst case, if something goes awry… learn from your mistake and adjust accordingly.

4. Don't try to time the market

The lesson: Time in the market is better than timing the market 

There is another Warren Buffet which helps to perfectly exemplify this billionaire lesson:

“The only value of forecasters is to make fortune-tellers look good.” 

His message?

Trying to time the market is often a recipe for disaster.

Sure you might get lucky, but ultimately, by trying to time the market, you’re looking in the wrong place or simply focusing on the wrong thing.

Look at all those property forecasts made a year ago and how wrong they were.

Buying under the guidance of incorrect forecasts could be a disaster.

On the other hand, think about all those investors who bought property when all the forecasters said the property market was going to fall in early 2023.

They’ve done very well.

Sure, the concept of timing the property market is a tantalising prospect for many investors.

It's the alluring idea that one can predict the perfect moment to buy or sell properties to maximise gains or minimise losses. But, it’s an approach fraught with risks and is more like gambling rather than investing.

The property market is influenced by a myriad of factors – economic cycles, interest rates, government policies, consumer sentiment and even global events – making it incredibly difficult, if not impossible, to accurately predict its movements.

So the reality is we have no idea what will happen in the short term, and we would never think about or focus on short-term goals…. So why try to time the market in the short term?

Instead, buy when you are ready and when you can afford to.

Always ensure you buy an investment-grade property in an A-grade property which will hold onto its value well.

Successful investors understand that they succeed by understanding market cycles, not by trying to outsmart them.

They know that property values tend to rise over the long term, and they focus on selecting quality properties in good locations, which are likely to appreciate in value irrespective of short-term market fluctuations.

5. Understand the power of delayed gratification

The concept of delayed gratification plays a pivotal role in wealth creation and successful property investment.

This principle, which involves the ability to resist the temptation of an immediate reward in preference for a later, often greater reward, is a fundamental trait observed among all successful investors.

It aligns with long-term planning, encourages financial discipline, builds resilience and patience, and leads to more significant and satisfying achievements.

If you do the hard things now, you'll have an easy life later. If you do the easy things now you're likely to have a harder life later.

Charlie Munger has been quoted saying:

“Waiting helps you as an investor and a lot of people just can’t stand to wait.

If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” 

And he, like many other successful billionaires, is right.

Most of these billionaire lessons revolve around looking at and working toward the future and in order to do that you might need to delay your gratification from the present.

You can’t succeed in 10 years if you’re only thinking about what you can get out of it tomorrow. 

Here’s another way of looking at delayed gratification.

Ask yourself: What would your future self thank you for?

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• Also read:This week’s Australian Property Market Update – Latest Data, State by State April 23rd 2024

What can I start now that in 10 years’ time, I’ll be thankful I did?

I know personally how powerful this can be because 10 years ago I did start something I’m profoundly grateful for: I started podcasting – initially together with Kevin Turner and for the last 7 years on my own (with guests of course) - The Michael Yardney Podcast.

Now, it is a significant driver of our business and recording it is one of the highlights of my week.

Sure, part of its success came from the luck of being an early mover in a growing medium but generally, if you do anything for 10 years, it’s probably going to change your life in some way.

Another example is doing more exercise training.

I started this 4 years ago, and I’m really glad I did.

In 10 years’ time, when I’m 81, I imagine I’ll be delighted with my past self.

This question is powerful in an “instant gratification” world, and I’m not immune from seeking quick wins.

But wow I’ve achieved decent success in a couple of projects, I find myself looking for ways to achieve that same level of success rapidly in new areas and skip the multi-year grind.

Eventually, I remembered that’s the wrong way to think.

The answer is to just start, stay consistent, and wait longer than you’d like for the eventual (and inevitable) results.

6. The planning trumps the plan

The lesson: The most important part of a plan is planning a plan for when that plan doesn't go to plan! 

There are a couple of billionaires with lessons to share about this concept. 

“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioural discipline that are likely to get you where you want to go,” Benjamin Graham.

“If you fail to plan, you plan to fail,” Winston Churchill.

Having helped deliver hundreds of Strategic Property Plans to Metropole clients, I know the benefits of creating lifetime Wealth master plans.

We’ve created hundreds of plans for clients and more importantly, we’ve also updated hundreds of plans.

It’s a pleasure to create the first Strategic Property plan for a family - listing all of their wealth goals and what they wish to achieve while building a substantial asset base as the facilitator of these goals.

The plan should list everything that requires time, money and planning in order to achieve it.

But the initial plan is not the important element of the process - it’s the planning process that’s crucial.

The initial plan will be the foundations.

Wealth and property plans are built to be fluid and in flux, reflecting life.

You don’t need to stick to something that no longer suits you just because you set it out a while back.

A rigid plan is not a real plan… In fact, I've often said, “Plan for your plan not to go to plan.”

It’s been over a decade that we’ve been creating Strategic Property Plans for our clients at Metropole and I’ve seen huge changes during this time.

And some of these changes were unthinkable when the plans were first created.

I have also seen families achieve their goals and apply the correct behaviours to ensure they are not derailed.

After all, our complex world is full of surprises, set to try and test our ability to stay committed to our carefully thought-out wealth and property plans.

I know from experience that it’s very hard to stick to an agreed plan without having an independent adviser in your corner – somebody to hold you to account and be a sounding board for major decisions.

It’s also important to have somebody who can identify any financial misbehaviour and ensure there are no gaps in your plan.

The real value is created by frequently coming back to your plan (at least annually) and making the changes that become necessary as life plays out.

The plan itself reflects just one period of time - the planning process trumps the actual plan.

At Metropole our regular client reviews ensure you focus on implementing your plan and the plan just comes along for the ride.

The bottom line

Billionaires offer a whole wealth of advice for any investor looking to set the right path to success.

Their achievements should inspire investors to make sure they’re on the right track, have the right plan and make well-researched decisions.

The path along the way might be a bumpy one, but as we know, that just adds to the learning experience.

It’s likely the next few years will deliver even more uncertainty, so the first step towards your financial freedom is to gain knowledge to take control of your situation today.

So please let me leave you with a final thought…

Always continue learning and striving for success.

The markets will humble you if you don’t check your ego at the door.