Lately I've been thinking, why can some people keep making money while most people keep losing in the financial markets? The answer may lie in Warren Buffett's seemingly simple but profound investment principles.

Buffett's most famous quote is "Rule number one: Never lose money. Rule number two: Never forget rule number one." It sounds simple, but executing it requires real discipline. Once you're in a loss, the profit return rate needed to break even increases exponentially. That's also why he's so cautious about leverage — he once said in 1991 that he's seen too many people fail because of excessive borrowing. Instead of relying on high-risk strategies like leveraged finance, it's better to be steady and prudent.

Another core idea of his is "Price is what you pay, value is what you get." This means you should look for undervalued opportunities. He likes to say, "Whether it's socks or stocks, I like to buy quality items on sale." The same logic applies to everyday spending — don’t spend big on things you rarely use, and don’t get trapped by high-interest credit card debt.

The importance of cash flow cannot be overstated. Buffett mentions that Berkshire Hathaway always maintains at least $20 billion in cash reserves. He says, "Cash is to a business what oxygen is to a person." This principle also applies to personal finance — don’t put all your liquid assets into investments; leave some buffer. Especially before considering any form of leveraged finance strategy, you must ensure you have enough cash reserves to handle emergencies.

Regarding debt, Buffett's stance is very firm. He once said that if he borrowed at 18% or 20% interest, he would have gone bankrupt long ago. Credit card interest rates are so high because issuers know most people lack self-discipline. Instead of relying on borrowing, it’s better to increase income through investing in yourself. He mentions, "Investing in yourself can yield ten times the return, and no one can tax or steal those gains." This includes learning, skill development, and financial education.

For ordinary investors, Buffett’s advice is quite practical: invest in low-cost S&P 500 index funds. In his letter to Berkshire Hathaway shareholders, he wrote that you can put 10% in short-term government bonds and 90% in low-cost index funds. If you invest gradually over 10 years instead of all at once, your performance will surpass 90% of investors in the same period. This steady approach avoids the risks associated with leveraged finance.

He also emphasizes developing good money habits. In a speech at the University of Florida, he said, "Most behaviors are habitual; the chain of habits is so light that you don’t feel it until it’s too heavy to break." This means every financial decision you make now is shaping your future.

Finally, Buffett’s long-term mindset may be the most overlooked but most important. He says, "Today’s shade is because someone planted a tree long ago." Financial security isn’t achieved overnight; it’s built over many years. Whether paying off debt, ensuring retirement, or saving for children’s education, all of this requires thinking in decades.

Overall, these principles point to a common theme: avoid unnecessary risks, especially those from excessive leverage or bad habits. True wealth is built through discipline, patience, and continuous learning, not by chasing quick gains or complex financial instruments.