Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1. (2024)

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Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.? ›

"The first rule of an investment is don't lose [money]. And the second rule of an investment is don't forget the first rule. And that's all the rules there are." This quote from legendary billionaire investor Warren Buffett has become one of his most well-known aphorisms.

Losing money can be devastating to an investor's portfolio and can take a long time to recover from. Rule No. 2 is never forget Rule No. 1. This means that investors should always be cautious and mindful of the potential risks of their investments.

Warren Buffett 1930–

Rule No 1: never lose money. Rule No 2: never forget rule No 1. Investment must be rational; if you can't understand it, don't do it. It's only when the tide goes out that you learn who's been swimming naked.

Buffett is seen by some as the best stock-picker in history and his investment philosophies have influenced countless other investors. One of his most famous sayings is "Rule No. 1: Never lose money.

Rule No. 1 – Never lose money

Rule No. 2 is never forget Rule No. 1.” The Oracle of Omaha's advice stresses the importance of avoiding loss in your portfolio. When you have more money in your portfolio, you can make more money on it. So, a loss hurts your future earning power.

It is a reference to an old M*A*S*H episode. Rule Number One is that, in war, young men die. Rule Number Two is that doctors can't do anything to change Rule Number One. Everyone is damaged, including the doctors.

Life has two rules: #1 Never quit #2 Always remember rule # 1. “Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.

A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.

Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.

Buffett's investment strategy stands out because of his aversion to losses. Instead of accepting losses, he tends to double down on his positions or even increase his investments when they go against him. He believes that if you like a stock at a certain price, you should like it even more when the price goes down.

What is the golden rule of money? ›

Before we dive into the details, let's first understand the concept of the golden rule of saving money. Simply put, it states that you should always save a portion of your income before spending it.

One simple rule of thumb I tend to adopt is going by the 4-3-2-1 ratios to budgeting. This ratio allocates 40% of your income towards expenses, 30% towards housing, 20% towards savings and investments and 10% towards insurance.

What is the rule of 7? The rule of 7 is based on the marketing principle that customers need to see your brand at least 7 times before they commit to a purchase decision. This concept has been around since the 1930s when movie studios first coined the approach.

Brief summary

"Rule #1" by Phil Town is an investing guide that teaches readers how to identify great companies selling at a discount and invest in them with confidence. It offers actionable advice for both beginner and experienced investors looking to take control of their financial future.

The Magic Number: 10%

To be considered strong, all the Big Five numbers should be equal to or greater than 10% annually for the past 10 years. This consistency over a decade is a testament to a company's enduring strength.

The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade.

You've probably heard of the rule of three before. It's a principle that says that things that come in threes are more memorable, satisfying, and effective than other numbers of things.