Burleson Blog

Articles of interest for the successful orthodontist.

How Sound Are Your Investments?


Warren Buffett once said “Someone is sitting in the shade today because someone planted a tree a long time ago.” This simple short quote says so much when it comes to the investments that we make. When we make the right investments they will be there for the long haul and years down the road they are going to provide us the shade we are looking for.

Buffett, who is reportedly worth around $76 billion, wasn’t always rich. But it seems his mindset had him on the right path to get there. By the time he was a teenager he was already making more money than most adults were. His plan was to become a millionaire by the time he turned 35, and he far surpassed that, going on to become one of the richest people in the world.

But how exactly did he become so successful? This is a question that everyone wishes they had the answer to, just so they could try to emulate even a small portion of it. But if you listen to some of what Buffett has had to say over the years, he has indeed shared some of his secrets of success. One of the things he said that stands out was part of a speech he gave at the Wharton School of Business back in 1999. He delivered to that audience what he referred to as four rules for investment, and what important rules they were.

One of the rules that he shared that has stuck with me was that he believes a sound investment is one that behaves like a castle, on a hill, surrounded by a moat. This visual image should help you protect your investments and maintain your value as an investor. Following this logic today he still has rock-solid investments that pay off, like insurance and basic goods and services, even if he has felt the pinch when it comes to certain industries having ups and downs.

Another important rule that Buffett shared that day was that he believes you should always understand the business you are investing in. This may be one of the main reasons why he didn’t get caught up in investing in the first tech bubble. It was an industry that was so new that it didn’t yet fully understand itself. He avoided getting mixed up in it, instead keeping his focus on investing in things he understood. Buffett has maintained investing in companies that he understands. His focus is on such things as insurance and the transportation industry. These are areas of investment that he knows, uses, and feels has as strong base for longevity.

This brings me to an important point for this month, which is to consider these principles as you go forward with your planning this month and throughout the year. You want to continuously strive to push forward, but also remain on solid ground, so that you have strong roots invested in things that you know work and that you understand. Don’t stop your internal and referring dentist campaigns and run off with some new-fangled shiny object that promises to solve all of your practice problems. Instead, build on the foundation and then you can test new strategies.

Test new things that will help you become stronger and more profitable, such as our monthly newsletter, attending seminars, getting consulting or coaching, or investing in equipment and human capital that will help your practice grow. Now is a great time to get started down the right path toward investing in success that will carry you through another year.

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