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"It’s easy to make a CAPS call and take the risk when my and my family’s financial well-being isn’t at stake."

 

I would like to make a comment about following Warren Buffett. I have a personal belief that one of the key factors that allows Warren Buffett to make certain investment decisions is his modest lifestyle. It seems well published that his lifestyle likely demands an annual income below $100,000. (Except his admitted penchance for private jets.) It seems to me that one thing that enabled him to make certain bets is that he knew his family's financial well-being was never at stake, at least not after he made his first million. After a certain point, even if he lost all his investment funds, as long as he kept one or two million, his own lifestyle would not change. All the rest was "play money".

 

So many of us profess to admire Warren Buffett's investment ability, yet how many would still be spending hours studying stocks if we knew we would never actually use the funds to life the high life? Are there some investors who accumulate $10 million, but when their lifestyle adjusts accordingly, they find themselves unable to wager $9 million because "their family's well-being" is now at stake? It's hard enough to get to $1 million, harder still to get to $10 million, but $100 million, and then $1 billion? It seems you have to bet the farm over and over again to get there. And unless you're willing to live the humble life, it makes it much harder to bet it all.

 

my two cents

 

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