Buffett's story should be taught right up there with George Washington regarding his importance to the American experience and collective psyche. When teenagers sit in high school classrooms and study courses in personal finance, for example, I hope part of their curriculum includes books on Mr. Buffett, just as American history classes should feature stories about Washington.
Full disclosure: Only recently have I become a Buffett junkie. My obsession started when I watched that famous HBO documentary. Lately I'm reading everything I can find about him and watching countless videos. While I don't know the man personally, nor do I own any shares of Berkshire Hathaway stock, and this particular post is out of my normal comfort zones regarding subject material, I have to say I've enjoyed writing it very much. I hope you will benefit from it as well.
 |
| Photograph by Danuta Otfinowski — http://fortune.com/2016/08/15/warren-buffetts-berkshire-hathaway-boosts-apple-stake-sells-walmart/ |
What follows are random bits of wisdom and truths I've discovered from my informal research.
These bullet points are (mostly) not in Buffett's own words, rather my interpretation of what he might think or say. There is plenty of great work featuring his direct quotes and whatnot, biographies and the like--this piece is more philosophical in nature; however rudimentary my understanding may be, I believe I've distilled down some useful thought forms.
1. Time can be your friend of your enemy; whether in finance or anything else, time is an ally to be cultivated, or a monster that devours us whole--when you do good things and follow a worthwhile process, time will most often reward you with the blessings of the fruits of your labors (not to mix too many metaphors). If we're acting in hurtful or self-destructive ways, time crushes us as our problems only get worse and worse. And never rush important financial decisions based on someone else's timetable, as in "if we don't buy this house today, someone else will."
2. Your habits and commitment to a process will take your farther than mere intellect or even talent; don't think you need to be the smartest or even the most talented person in the room to be the best; there is so much more to success than just mere ability--our habits and beliefs, all the little things we do all day long, as well as the way we think about ourselves and the way we see our lives, matter so much more.
3. Start young--you're never too young to begin your life--this notion of waiting until you grow up has got to go. Even in childhood we can discover our lifelong passions and areas of expertise--it is never too young to begin. Even if starting something simply means watching others and observing--you'll find older people who will help you as mentors and advisers--people will be surprisingly generous to a young person captivated by some noble ambition, even if that nobility is simply that they want to be really great at something.
4. Failure can be your greatest teacher; when you fail, take apart the experience and examine what occurred, so you're better equipped next time. Look at any failure as a step in the learning process; many bad things in life can be overcome if we're willing to start over and follow a sound process.
5. Play to your strengths, don't be at the mercy of your weaknesses; find out what you are really good at and stick to it. You'll have a much higher rate of success if you stay within your area of expertise and continue to deepen that expertise. This message requires some mental and ego discipline and some tolerance of boring moments waiting for that magic moment when opportunity meets fortune and we are able to make the winning move.
6. A lot of brilliant people have horrible lives; much of our happiness really does boil down to our own choices and especially our expectations regarding our lives; sometimes expecting less leads to greater happiness. Even great intellect and material success don't necessarily equal happiness. Happiness seems more a product our own own minds and beliefs regarding whether we are living life on our own terms or according to someone else's rules.
7. Live below your means; the surest path to wealth (and probably financial peace) is to spend less than you make, and to avoid debt whenever possible. There is a classic short story called The Death of Ivan Ilych by Leo Tolstoi, If you want to know the torture of living a false life based on materialistic keeping up with the Joneses' what was true in 19th century Russia is still true today. Buffet, one of the wealthiest men in the world, still lives in the same and the first house he bought back in the 1950s.
8. Dance to the beat of your own drummer--it's more than OK to be different; it is essential to your happiness. In so many ways Buffett illustrates that we only get one life and it is complete folly trying to live it based on someone else's rules. Know yourself well and knowing what works for you and what doesn't are key concepts--perhaps slightly easier when one is a billionaire, but something we must all come to terms with. Remember he didn't start out as a billionaire!
9. Take care of your body and mind--you only get one; he's seen telling high school kids this wise tidbit of advice; furthermore he's been quoted many times saying we should develop ourselves through education and an ever-expanding spiral of self-improvement and qualifications. Just another feather in your cap as my dad said frequently.
10. We don't need an extravagant lifestyle to be happy; really, no matter if you're an hourly wage earner or billionaire, there is a great degree of personal preferences you get to control. Buffett going to McDonald's for a breakfast that costs a couple bucks is the ultimate metaphor when he could have a personal live-in chef.
11. Make money work for you, not the other way around--the not-so-hidden secret to building wealth in a capitalist system.
12. You can only control how you react to something and how you treat other people, not the reverse; this is about emotional fitness. Apparently, there is a whole lot Buffett has to say about how our emotions qualify our success especially where money is concerned.
13. Integrity matters; one's reputation is worth protecting and any time we might be (even slightly) tempted to cut corners ethically (morally or even legally) speaking we should avoid that temptation. Always best to do things the right and honorable way--you will never have to remember any alibis or elaborate stories. Buffett I've been told likes to go on TV just so he can never be misquoted. He does not take the honorable reputation he's built up lightly and neither should we.
14. Don't waste too much time on your phone or your PC; refrain from too much time on social media. I've seen interviews where, when asked why he isn't on Twitter, Buffet simply says something to the effect of, what exactly would that do for me? Aside from the occasional and very welcomed re-connection with old friends or family, or perhaps promoting a business, time on Facebook, for example, leads mostly to rising blood pressure and time wasted.
15. Being a feminist makes a lot of sense; it is OK to acknowledge the ovarian lottery.This point makes many men uncomfortable but not Buffett. So much of success one might agree is determined at birth as to where, when and what biological sex we are born into. He works for equality for women and freely acknowledges his sisters were just as smart as he was without the same opportunities, born as women in an earlier time and place. Feminism makes sense, especially now, when we realize we have access to the work and creative talents of half the population. The more America and the world promotes equality for women, the brighter the future will be for everyone.
16. Perhaps the greatest gift wealth affords is that you can help others; his example here regarding philantrophy would be hard to top, but the premise is one we can all follow--he who dies rich, dies in disgrace. You can give it all away; you really can. Why not realize the power of your decisions and how they can impact others' lives for the better? Again, none of us will be able to match Buffett or his pal Bill Gates' philanthropy, but we can all do something to make this world a better place. Don't leave the money to your kids, give it away.
17. Would you still do your work even if you didn't get paid for it? If what you're doing for your chosen career isn't something you're passionate enough to do for free, you might be in the wrong field. I've heard Mr. Buffett say something to the effect of, if you're doing something you like with people you like, you're on the right track.
18. Remember this is all just a game anyway--in the end everybody loses--well, that's at least one interpretation of death--but maybe loss isn't that scary anyway-- maybe it is freeing, especially if this insight allows us to approach our endeavors with a kind of casual seriousness and relaxed focus, like an athlete in the zone. Sometimes the freedom of playing a game instead of the tension of what if I make the wrong choice works much better getting you into that zone in the first place. He might deal in billions and billions with the rise and fall of civilizations riding on his decisions, but Mr. Buffett seems pretty chill in the final analysis.
19. Work on your communication skills, especially public speaking. Buffett often credits his Dale Carnegie public speaking course with increasing his success exponentially. I can tell you most millennials are deathly afraid of public speaking, all this fear conversely existing in an age where our every emotion and whim are often on display on Social Media. I do believe an important component of our voice is masked when we refrain from taking our inner life outside for the rest of the world to see--in person--not on Social Media. This is a key element in my writing courses; when I say voice is it much more than just the sounds we make. There is a connection to some inner source of power that is completely obscured by fear of embarrassment
20. Focus is the one thing we have the most control over that directly leads to success in any endeavor, and in today's world of multi-tasking and electronically-induced ADD, focus has never been more challenging or important.
Some links and resources:
Annual Letters to Berkshire Hathaway Shareholders
The Snowball Effect (excellent biography of Buffett)
University of Berkshire Hathaway (a book about the annual shareholders meetings)
Yahoo Live Stream of Annual Shareholders Meeting
HBO Documentary
BBC Documentary
Thanks, Marc. Great insights.
ReplyDelete