Do you ever wonder how some investors manage to stay successful for decades even when the market crashes, trends change, and new industries rise and fall?
If you’re looking for consistency, you can’t ignore the legacy of Warren Buffett.
From 1965 all the way to 2024, Buffett’s company “Berkshire Hathaway Inc. (BRK.A)”delivered an average return of 19.9% per year. That’s nearly double what the S&P 500 has returned over the same period.
And guess what? Even in the unpredictable early months of 2025, while the S&P 500 lost around 4.3%, Berkshire managed to gain over 16% in total returns. That’s discipline, strategy, and time-tested habits. The kind of principles you’ll start to recognize once you get familiar with investing terms for beginners.
So, what exactly is Buffett doing differently? It is time to walk you through five powerful habits Warren Buffett has stuck to throughout his career.
Habits that you can start using today to build long-term wealth and avoid common mistakes.
1. Do You Really Understand What You’re Investing In?
Buffett often talks about something he calls your “circle of competence.” What does that mean?
It means you should invest in businesses and industries you personally understand, not just what’s trending on social media or hyped by influencers.
For example, during the late 1990s tech boom, Buffett stayed away from most internet companies.
Many people thought he was being old-fashioned. But when the dot-com bubble burst, Berkshire Hathaway avoided major losses simply because Buffett didn’t invest in what he didn’t fully grasp.
Ask yourself:
● Do I understand how this business makes money?
● Could I explain this investment to a 12-year-old?
● Am I investing because it makes sense or just because everyone else is?
Sticking to what you know helps you avoid impulsive decisions and build confidence in your portfolio.
2. Are You Thinking Long Term or Just Hoping for a Quick Win?
Buffett is famous for saying:
“Our favorite holding period is forever.”
That’s not just a catchy quote. It’s a mindset.
He doesn’t jump in and out of stocks based on the latest headlines. Instead, he buys strong businesses and holds them for years, sometimes decades, allowing time and compounding to do the heavy lifting.
If you’re constantly checking your portfolio or trying to “time the market,” ask yourself:
● What if I focused more on time in the market, rather than timing the market?
● What would change if I committed to holding my best investments for 5–10 years?
Staying invested in good businesses gives your money the room to grow.
3. Would You Trust the People Running This Company?
You’re not just investing in a stock. You’re investing in people.
Buffett only puts his money in companies managed by leaders he trusts: honest, capable, and focused on shareholder value.
So how do you spot good management?
Here are a few signs:
● Clear and transparent communication in earnings calls and reports
● Executive pay that matches company performance
● Founders or executives who own a large stake in the business
● A history of delivering what they promise
On the flip side, be cautious of companies with frequent accounting changes, confusing business structures, or perks-heavy leadership teams. These are often signs of deeper problems.
4. Are You Paying a Fair Price Or Overpaying for Hype?
Even the best business in the world isn’t a good investment if you pay too much for it.
Buffett learned this from his mentor, Benjamin Graham, the father of value investing. The idea is simple: don’t buy a stock unless its price is lower than its real worth.
That means avoiding “hot stocks” that are already overpriced and instead, looking for quality companies that are temporarily undervalued.
A few questions to ask before buying:
● Is the company’s stock price justified by its earnings and assets?
● Are you buying because it’s cheap, or because it’s good value?
Price matters. Buying a great business at a great price sets you up for better long-term returns.
5. Can You Stay Patient Even When Everyone Else Is Panicking?
Buffett’s most underrated skill? Patience.
He doesn’t chase short-term gains or get rattled by market dips. Instead, he stays focused on the long-term vision.
“The stock market is a device for transferring money from the impatient to the patient,” Buffett once said.
It’s easy to get nervous when your portfolio dips or everyone online is talking about the “next big thing.” But history shows that staying calm and staying in often pays off.
Ask yourself:
● Can I ignore short-term noise and focus on long-term results?
● Am I making decisions out of fear or from a solid plan?
Patience isn’t passive. It’s strategic.
Final Thoughts
You don’t need to be a billionaire or even a full-time investor to learn from Warren Buffett.
Start with these five habits:
- Invest in businesses you understand
- Take the long view
- Trust in strong leadership
- Be price-conscious
- Be patiently disciplined
These aren’t quick hacks. They’re principles that stand the test of time.
So ask yourself: What’s one Buffett habit I can start applying today?
