Warren Buffett has not become a polyinioner for no reason.

Omaha’s sage spent decades by investing and building his wealth, learning many lessons along the way. Fortunately, for other investors he was ready to share many of these lessons for free.

As a private investor with a confined match, it can be easily looked at the billionaire and think that they act in another universe.

In fact, one of the reasons why so many investors talk about Warren Buffetta, is that some of his long investment career may be relevant to investors even with a very miniature budget.

Here are three ideas that Buffett uses, which I apply, even when investing only a miniature amount.

Knowing what you know – and you stick to it

Warren Buffett has repeatedly talked about the importance of staying in a circle of competence as an investor.

The point is that it does not matter how wide or narrow this wheel is, but that it will remain inside it is more likely that it has the necessary knowledge to assess a possible investment.

Doing differently – putting money into something that you do not understand – is not investing, but in my opinion ordinary speculation.

Focus on a long -term competitive advantage

Companies come and companies leave. Some, however, are here in the long run.

It is arduous to state in advance what companies can remain and good. Trying to do this, Warren Buffett is looking for a competitive advantage or what he calls “a moat” (because it can support push his rivals in a way that a moat in a medieval castle can support to know possible invaders).

To see this concept in action, consider its investment in Coca-Cola (NYSE: KO).

It works on a market where the demand is high and probably will remain so. People will always be thirsty and want to quench their thirst.

But, as in the case of many markets where there is high demand, there is also significant competition.

So Coca-Cola spent decades at the construction site and strengthening a number of competitive benefits. His brand, supported by bulky advertising, is one. The reserved formula of its flagship product is another one.

But the moat of Coca-Cola works deeper than just a brand and product. Global Reach gives economics of scale, while his extensive distribution and bottling system would be arduous, if it is not impossible for rivals to repeat.

Buffett is an smart investor who has always considered the risk, as well as possible prizes. The Coca-Cola portfolio saw the decreasing demand when consumers who care about health move away from sweet drinks.

But this is part of the competitive points: they can, let’s hope that the company is even in a risky environment and deal well.

Maintaining emotions in their place

Buffett uses an emotional language, often talking about the companies he loves.

But when the emphasis is coming, the billionaire investor has repeatedly proved that he is ready to make challenging, rational business decisions.

His investor’s goal is to build wealth, which can mean making arduous decisions. Emotionally, it may seem arduous – but necessary.