How to become rich fast: 3 tips to invest right; Warren Buffett's annual letter decoded

It is celebrated as an event on the New York's wall street this time of year, whenever Berkshire Hathaway's Chairman Warren Buffett releases annual letter. Berkshire Hathaway posted its last quarter's results last week, and much awaited Buffett's letter addressing the shareholders was greeted as teaching for investors. The letter declared about the insights of Berkshire Hathaway and why company posted a rare quarterly loss of $25.39 billion. However, the interesting claims that Buffett made in his letter teaches another lesson to investors who want to become like him. 

The 'Oracle of Omaha' talked about 3 key things which can make an investor sit on a huge stack of wealth. However, he mentioned about the history of the USA, his company, the performance of S&P 500 index, his investments etc. but the 3 things which makes this letter a forever mantra for investors worldwide are: 

1. 'Focus on the Forest – Forget the Trees':

Buffett started the head with ''Focus on the Forest – Forget the Trees', into which he mentioned about other areas where Berkshire has performed extremely well leaving the fact that it posted a rare loss this quarter. 

By this, we can conclude our first tip that an investor should never focus on just one prospect of business during investment. There are many more prospects that are supposed to be analysed and scrutinised before making a decision to buy or sell. 

It could be possible that the company might show negative in one area, but if it has a sound business, it is definitely a long term buy and hold kind of investment. 

2. Fact remains the fact:

A fact that a company is strong enough internally, always remain a fact, no matter if it is doing no good for a time being. This tells us that business with historical trust, sound management, strong fundamentals, excellent products\services and great market reputation always remain an option of investment. Even if the market commentary is against the business, these facts will remain the facts forever.  

To explain this, Buffett wrote, "Abraham Lincoln once posed the question: “If you call a dog’s tail a leg, how many legs does it have?” and then answered his own query: “Four, because calling a tail a leg doesn’t make it one.” Abe would have felt lonely on Wall Street''

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3. Power of long term investments:

Buffett wrote about his investments in 1942, "If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019 (the latest data available before the printing of this letter). That is a gain of 5,288 for 1. Meanwhile, a $1 million investment by a tax-free institution of that time – say, a pension fund or college endowment – would have grown to about $5.3 billion.'' mentioned Buffett in his annual letter, he added. 

However, he mentioned about the S&P 500 index and its performance over a time of 77 years, but the third tip which can be concluded from this example is- Stay for a longer term. 

An investor should remain invested for good long years as a sound business in an excellent growing economy is always like, building a massive wealth for future. The power of long term investment is way more than any other investment strategy according to the Investment guru, Warren Buffett.