The Wealth Tao: Wu Wei

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I have just three things to teach: simplicity, patience, compassion. These three are your greatest treasures. Lao Tzu       Funny, but the Master of wealth-building says the same thing: "The stock market is a device for transferring money from the impatient to the patient." Warren Buffett       Patience is important in life and in building wealth. Most investors are not patient so most investors are not wealthy. In fact, the average investor earns only 2.56% annually according to DALBAR's annual Qualitative Analysis of Investor Behavior. Mr Buffett's strategy of patience is the most successful. He earns about 20% a year compounded over time. He does not buy and sell stock. In other words, he holds the stock of companies for a long time.        Most investors jump from one successful stock or mutual fund to another. Each time they do this, they are basically paying at the higher price AFTER the security has proved successful. Each time they are disappointed and then sell at a lower price. Every buy and sell transaction costs them a commission or fee, reducing their gains even more. They earn 2.56% while Buffett earns 19.7%.       Wu wei is the core of the Wealth Tao. It means there is no need to struggle to reach our goals. Once we establish our stock portfolio or mutual funds, we do nothing to stop the growth of our account. We patiently let the market provide our wealth. Buffett has been patient for over 40 years and has grown his initial investment of $6,000 (from paper routes) to $65 billion. You don't need to do a thing to grow your money in the stock market.       As Buffett has said: We continue to make more money when snoring than when active. berkshirehathaway.com/letters/1996