Red Hat CFO shared tips with budding investors

Red Hat's CFO, Frank Calderoni, shared with Business Insider some tips for budding investors and financiers.

A brief historical excursion - Mr. Calderoni was appointed Chief Financial Officer of Red Hat quite recently (last week), before that during the decade he held a similar post (CFO) at Cisco. So, Frank Calderoni’s transition from one position to another, but in two quite different companies and a business model, can’t be called a “vector change”.

In addition, Frank’s performance at Cisco is impressive: for 10 years at CFO, Calderoni managed to increase annual revenue from $ 22 billion (in 2004) to $ 47 billion last year. Annual earnings rose from $ 0.62 per share to $ 1 , 49 - more than twice.
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Returning to the advice of young investors - the main message of Frank Calderoni is: “Diversify”.

And now the full quote:

If you invest for the first time - diversify, diversify again, and then - diversify again. Putting all the eggs in one basket has never been a good strategy. Be prepared for changes in the market, fluctuations in the stock price and the volatility of the value of securities. Only in this case, high-risk investment instruments will bring profit in the long-term interval.

Another thing I want to recommend to investors is to invest only in the calculation of long payback periods, at least for 10 years. In this case, the long-term increase in value will exceed the average growth of the market or its cut.

At the end of the dialogue with the correspondent of BI, Frank Calderoni talked about where his attitude to money came from:

My father always said that “the ruble saves the penny.” As for me, I have always invested primarily in myself, starting with the creation of the first individual “financial safety cushion” (reserve in the form of semi-annual income), which has repeatedly helped me cope with unexpected turns in my life.

Prioritize your savings, set the importance of your own investments, such as children's education, life and health insurance, and finally, payments on loans and everything else. Only after that invest your funds in long-term investment instruments, and if you can not - then pay a little more for your mortgage.