Golden State Warriors star Kevin Durant is one of the biggest names in the NBA. After eight years with his hometown team, the Oklahoma Thunder, Durant shocked fans when he signed a two-year, $51 million contract with the Warriors and moved out to San Francisco. But basketball isn't the only thing Durant's doing in the Bay Area.
He's also diving into the business world through his own Silicon Valley-based start-up, the Durant Company, which he founded in 2016. He's invested in a number of tech ventures, including Acorns and Postmates.
But before getting into business, Durant didn't realize the immense amount of effort that goes into making a worthwhile investment, he told ESPN when asked about the craziest thing he didn't previously know about investing.
"I used to think these billionaire venture capital firms got a hold of one company, invested in it and it blew up," he said. "I didn't know that they get 100 deals to look at in a day and pick the best nine or 10 to consider. That's a lot of work."
In reality, as he has learned, it's a lengthy process that involves carefully vetting every aspect of a company. "You can't just skim through it," Durant said. "They figure out what the companies are, they talk to the CEOs, the coders. They have to really do their homework on it."
Investing is a whole new world for Durant, but he's learning as he goes. He told ESPN that to get better in business, "you have to remove the ego of it and realize that you don't know it all."
"I've got to ask questions, and I've got to have an open mind to it all," he said.
While Durant's company deals with large-scale investments, the same principles he's learned can be applied to personal investments as well. For starters, always do your research before handing your money over.
Financial experts generally recommend passive investments, such as index funds, which are a favorite of Warren Buffett. And if you think that "value investing," which involves picking individual companies and holding onto them long-term, may be right for you, you can follow Charlie Munger's four principles for picking winning investments.
In short, Munger advises doing your homework to find businesses that you understand and that have a competitive advantage that will keep them around for a long time. As Durant learned, to be a successful investor, you have to put in the work and not be afraid of asking questions along the way.
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