Exactly what is investing and what differentiates it from gambling? Warren Buffett gives a clear, concise answer.
“Investment is the process of putting out money today to get more money back at some point in the future,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “And the question is, how far in the future, how much money, and what is the appropriate discount rate to take it back to the present day and determine how much you pay?”
Hear Buffett’s full explanation
See the complete Lessons From Warren Buffett series
© 2022 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.