1. Spend wisely.

- Buffett still dwells in the 5-bedroom apartment he purchased 55 years ago.

- Money invested can earn over 20% annual return.

- Median household income: $45,800 (2010)

- Average spent on frivolous purchases: 15% or $6,870 — enough money to fill up a Hummer gas tank nearly 7x each month for a year

2. No one cares about your money as much as you do.

- Buffett makes all his own investment decisions for his best interests. not the commission-based interests of financial advisors, stock brokers etc.

- Over 1 in 3 Americans works with a financial planner

- But 45% of Americans have no financial plans

- 7% don’t even have goals or strategies they would use

3. Do your homework: scan thousands of stocks.

- Buffett spends 18 hours a day working on investment capital, saying investors should think of themselves as partial owners.

- ‘Never invest in a business you cannot understand.’ — Warren Buffett

- 40% of Americans say they’re financially literate, but 1 in 3 Americans couldn’t correctly answer this question:

- $100 is in a savings account with a yearly interest rate of 2%. After 5 years untouched, how much money is there?

- A: More than $102

- B: Exactly $102

- C: Less than $102

- (Answer: A: More than $102)

4. Overcome your fear of risk.

- Americans are afraid that investing will cause them to lose money, but Buffett says stocks outperform bonds, banks and even gold, and are safer, too.

- ‘Risk comes from not knowing what you are doing.’ — Warren Buffett

5. Focus on the long term.

- Gets 7% annual return

- Reaches $1 million by age 65

- Saver 2:

- Starts saving at age 31

- Put away $500/month through age 65 — 34 years

- Gets 7% annual return

- Reaches $1 million by age 65 — by contributing $150,000 more over the years

6. Invest in quality businesses.

- The result of doing your homework is determining worthy companies. Buffett is famously invested in Coca Cola, Wells Fargo and IBM.

- ‘An investor needs to buy the stock as if he is buying the whole company down the road.’ — Warren Buffett

- Remember Enron? It used to make headlines in a good way.

- Average lifetime of a Fortune 500 company in the 1960s: 75 years

- Average now: 15 years or fewer

7. Hunt for exceptional bargains for solid companies.

- Buffett recommends buying stock during a crash, when even great companies have extremely low prices.

- Analyze performance, mission statements, business process, long term goals and more.

- Fewer stocks can be better, so invest more time in more research, rather than more stocks.

- 5 valuable stocks can yield 71% of the benefits of a fully-diversified portfolio

- 15 valuable stocks can yield 87% of the benefits

8. Make decisions to invest based on how well money is being used by company management.

- Buffett feels penny-pinching indicates a profitable mindset. Once, he acquired a company whose owner took the time to discover his toilet paper roll wasn’t really the advertised 500 sheets!

- Assess these for the best picture:

- Return on Equity (ROE): Company’s net profit divided by shareholder’s equity

- Return on Capital Employed (ROCE): Company’s earnings before interest & tax deductions (EBIT) divided by the result of its total assets minus current liabilities

- Ideal condition: ROE and ROCE are about equal

- Over 40% of Americans report having made investment decisions based entirely on emotion

- Nearly 1 in 2 men have done so

- 1 in 3 women have done so

9. Be patient; wait until everything is in your favor to invest.

- When conditions align, buy an appropriate amount of shares. Buffett recommends holding stocks in 10-15 companies.

- In bad times, hold on. A quality stock should recover and you won’t have to regret selling prematurely.

- ‘I think the worst mistake you can make in stocks is to buy or sell based on current headlines.’ Warren Buffett

- 57% of retirement-age Americans have financial regrets

- Biggest financial regret for millionaires: poor stock decisions (10% regret this)

10. Sell losing stocks when the market is up; buy winning stocks during a crash.

- Selling a dud stock at its worst adds to your loss, and purchasing a great stock at peak price cuts your gains.

- ‘The beauty of stocks is they do sell at silly prices sometimes. That’s how Charlie [Munger] and I got rich.’ — Warren Buffett

- 25% of Americans track the ups and downs of the stock market at least weekly. but 17% think the market is too complicated and 11% just don’t know where to begin.

With these tips from guru Warren Buffett, you don’t have to take part in financial fear anymore. Go forth and invest wisely!