If others had to come up with inventions ahead of their time to be on the top of Forbes list.

This man has been the second richest man in the world for many years in a raw by simply

investing.

And what sets him apart from others is that he started with absolutely nothing.

Today, we will take a look at how warren buffet invests and how exactly he made over 85 billion

dollars.

But first, let's take a look at how buffet got into the investing first.

Warren buffet grew up in an average family, so he quickly learned the value of money.

At the age of 13, he started delivering newspapers, selling magazines and made a substantial amount

of money.

Which he invested later on into 40 acres of farmland.

He realized that if he wants to grow faster, he needs to get into the business.

When he turned 15, he used his savings to buy pinball machines and placed them in barber

shops.

Within few months he owned 3 different machines and then sold the business for 1200 dollars

or over 16 thousand dollars in today's money.

Fortunately, he was rejected by Harvard business school because then he applied to Columbia

business school, where he met his Mentor, Benjamin Graham.

Graham taught him how to win consistently in the stock market without speculations.

His method was simple, find undervalued companies, stocks that are priced lower than they actually

worth.

Buffet quickly realized the potential of this strategy.

So he went to work with his mentor at his investment partnership where he mastered his

method.

When Graham decided to retire, Buffet has already saved up around 150K dollars or 1.5

million dollars in today's dollars.

So, he decided to start his own investment partnership.

He applied the same strategy.

But in general, he was mainly looking for small companies that are doing just good enough,

but still, are undervalued.

Such as, Dempster Mill, a windmill manufacturing company which was a struggling business at

a time.

It was trading at 18 dollars per share.

But Buffet realized that company's assets worth 75 dollars per share.

So even if the company goes bankrupt, assets could be sold and he would still make a profit.

So over the next couple of years, he kept acquiring Dempster's Mill shares until he

became the majority shareholder.

In order to make a good profit from his investment.

Buffet changed the management, improved the operations and then sold the company three

times higher, than the amount he invested (80 dollars per share).

Buffet made multiple similar investments where he made a substantial profit.

And in less than 5 years of starting his partnership, the value of his investments grew to millions

of dollars.

In fact, his personal wealth finally crossed a million dollar.

After acquiring Berkshire Hathaway, his approach to investing changed.

Instead of focusing on small struggling companies.

He started buying more successful companies that are undervalued, such as the American

Express.

But, what actually brought him up to the top of Forbes list is the insurance business.

Buffet realized that Insurance companies work exactly like banks.

You regularly pay your premium for example, but only get your money back, if you get into

an accident.

So insurance's companies have a constant flow of cash.

Which are technically considered liabilities.

Exactly like the money you deposit into a bank.

Suddenly, Warren Buffet found himself having access to an enormous amount of money which

he quickly started investing in the right companies.

And in the next few years, his personal net worth crossed a billion dollar.

He kept doubling his net worth every few years by investing in some of the most successful

companies such as Coca-Cola, Bank of America, GM and so on.

Until he became the richest man in the world in 2008.

Buffet didn't achieve that by simply speculating and hoping to win.

But rather understood how the stock market works and consistently used the same strategy.

The good news is that, you can also learn how the stock market works and certainly be

like warren buffet if you put the effort.

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you everything you need to know.

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