The ultra-wealthy don’t get caught up in the latest fads, pouncing on the next “new” thing.
Take bitcoin, for example. The cryptocurrency took off in 2017, making instant millionaires out of some early investors. That spurred a lot of people to jump in and try their hand at making a fortune.
That could be fine – if you’re a professional trader or just want to play around with a little gambling money. Yet fads like bitcoin are risky business: The cryptocurrency has since fallen a stomach-churning 70 percent in the past year.
Buffett, who’s famous for his philosophy of investing in what he knows and then holding on to it for the long haul, told CNBC last year that “in terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”
The legendary investor, who is worth $80 billion, according to Forbes, believes you have to know what you know — and stay the course.
“What counts is having a philosophy … that you stick with, that you understand why you’re in it, and then you forget about doing things that you don’t know how to do,” Buffett said at the Berkshire Hathaway annual meeting in 2018.
Those who are caught up in the “follow the herd” mentality may do so because they are focusing on “one thing they think can make them rich overnight,” said Ivory at Delancy Wealth Management. “It doesn’t work.”