Emulating Buffett

BOOK REVIEW

Americans have two national pastimes: baseball and Warren Buffett. Whole industries have been spawned in recent years around the sayings and doings of Buffett - books, newsletters, mutual funds and television specials - all attempting to capitalise on the popularity of this unassuming gent from Nebraska.

Why this public fascination? One would probably say it's because Buffett is rich (yes, he is $30 billion rich). But that's only a part of it. A lot of people are mega-rich - movie stars, athletes and politicians. People's fascination with Buffett goes much deeper than merely his rather sizable bank account.

We are intrigued with Buffett because he is one of us. He can't dunk a basketball. He can't do Hamlet. He is just like any average investor. He made his billions doing something that's available to anyone. He got rich by buying stocks - Coca-Cola, American Express and Gillette.

That Buffett made his loot investing in common stocks gives him a certain accessibility. You can't be like Michael Jordan or Bill Gates. But you can be like Buffett. You can buy stocks like Coca-Cola and American Express.

That's why people are fascinated with Buffett. His path to wealth could be your path to wealth as well. You can also build a seven-figure portfolio. Eight Steps to Seven Figures shows you how.

The book doesn't tell how Buffett made his billions. Charles B Carlson, who authored the book, tells you how lesser known millionaire investors made big bucks. Carlson ruminates on the ways to make 'more' out of 'less'.

Too many people in this world settle for less. They do so because they don't know more is possible. More is possible - more money and financial freedom. But in order to have more, you'll have to get down to the task of creating wealth.

Unfortunately most people either don't know how to go about building wealth or aren't willing to make the necessary sacrifices. Instead they bemoan the wealth of others.

In their best-selling book The Millionaire Next Door, Thomas J Stanley and William D Danko claim that 80 per cent of the millionaires in the US belong to the first-generation. They didn't inherit wealth, they created it.

Make no mistake: you, too, can have a seven-figure investment portfolio, assures Carlson. In order to help you touch that magic mark, he sums up the recipes of a pack of about 200 millionaire investors.

Interestingly, none of the hugely-rich investors he talks about is a connoisseur in either finance or investing. They are all ordinary guys. For instance, Will Robinson, a retired metallurgist, and Bob Sutton, a 55-year-old school teacher, built seven-figure investment portfolios without any expertise in investing.

It must be reassuring to know that many of these investors started out in straits similar to yours. They had little or no money; little or no knowledge. They were afraid of failures and barely had a plan, but took the plunge and kept swimming.

They know what works on Wall Street and, perhaps more importantly, what doesn't. They know the hardships and the hurdles to be faced while initiating and maintaining an investment programme.

Eight Steps to Seven Figures is a definitive, step-by-step plan for investing your way to riches, claims Carlson. All it takes is eight simple steps - start investing, outline a goal, invest for growth, reduce risk by maintaining a long-term focus, focus on your strengths, take advantage of what the Street offers, limit shocks to the process of investing and keep investing.

But simple doesn't necessarily mean easy. You need patience, persistence and perseverance. You have to change the way you think about money and spending. But if you are up to the task, the steps in the book will make you a better investor - and a wealthier one, too.

The investors featured in the book share much more than investment secrets. Besides their age, income and education, we learn about investment mistakes. Their voice of experience could help you avoid such pitfalls.

Based on the real life experience of investors, Carlson distills investment rules everyone else can follow to become financially worry-free.

Filled with insights and investment advice that hundreds of everyday people have followed to become rich, and buttressed with countless you-are-there stories of how these millionaires did it, Eight Steps will probably prove handy if you have in you what it takes to walk the Street.

Eight Steps to Seven Figures

Author: Charles B Carlson
Publisher: Random House
Edition: 2000, paperback
Price: Rs 560
Book courtesy: CROSSWORD