Warren Buffet. Business magnate. Investor. Philanthropist. Current net worth: $53.5 billon. It might not hurt to take some words of advice from this guy. Your goal doesn’t have to be to make unfathomable amounts of money; your goal has to be to have success at what you love.
“Take a job that you love. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume. Isn’t that a little like saving up sex for your old age?”
- Warren Buffett
We couldn’t say it any better. Here are some more lessons from one of the most influential people on the planet:
1. Lose money for the firm and I will be understanding. Lose a shred of reputation and I will be ruthless. This is covered every year. Money can always be made again. Reputation doesn’t recover quite so easily. It’s all too tempting to trade long-term respect for a little short term gain. The world constantly tries to seduce us. Here’s an easy reminder: imagine whatever you do will be reported by an informed reporter the following day in your local newspaper for your family, children and closest friends to read. Act accordingly.
2. Don’t expect people to change. Berkshire Hathaway owns over 70 businesses. They buy a few more every year. But they only buy ones they won’t have to improve (contrary to what happens in acquisitions elsewhere). They’ve realized how futile is to try to changes others’ behavior. We love to paint a rosy picture that things will be better after some special event happens (an acquisition, a marriage, kids, a move, a new job, whatever), but for the most part, how people act is out of our control. Make sure the people you surround yourself with are the right fit from the beginning.
3. Conventional wisdom is often an indication of what not to do. 99% of business schools teach their students that the type of investing Warren and Charlie do is impossible. Who do you think’s right? (side note: it’s funny for two guys crazy about learning, to so openly put down business school, given 30% of the audience probably has an MBA or is trying to get one). The road less traveled still does make all the difference. If everyone’s doing it then it’s usually time to reassess. Be careful taking things as fact just because a bunch of other people do. Like we’ve seen before, everything was impossible until someone did it.
4. Fighting the tide can be brutal, but it’s usually the only fight worth fighting. Enough said.
5. Start as early as possible. When a 26-year-old asked Warren what he’d do in the man’s shoes, Warren said “If I had to do it over again, I would have done the same but earlier.” It is never too early to start something. The sooner you begin, the sooner you get your experience.
6. Don’t expose yourself to steps that can keep you from tomorrow. It can take a lifetime to build a masterpiece, but only an instant to destroy it. Very smart people have failed this way all throughout history. No matter what the possible benefit, these two guys refuse to do anything that opens them to the chance of going back to zero. That’s why they don’t use debt, and in their last 50 years have never faced a truly dire situation. In fact, when things are the worst for the world, is often when they do best. Nothing’s worth risking everything.
7. Tell the truth to a group of people who believe what you do, and things will work out.I do everything I can to run Live Your Legend the same way. Align with the right people and do it in an honest way. Pretty simple.
8. Great things are built as a result of the combination of time and consistency towards a cause you deeply believe in. Find what you’re good at – what you want to build. Then put your head down and allow a lifetime to build it. 40 years ago Buffet wrote out 13 principles of what he wanted to create and how he wanted it run. He then built a culture that executed on that every day. Just about anything can be done with the right focus, time and consistency. As long as you care enough and aren’t in too much of a hurry.
9. Be your own market of one. As a result of the culture they’ve built, Berkshire is often the only company a business owner is willing to sell to (even despite other more attractive offers). Those who think of Berkshire first, don’t think of anyone second. Instead of going out and trying to replicate those around you, go out and create a category. Then be the first guy to hang a shingle in that space. Be willing to do the things others won’t. Standing out will come naturally.
10. There’s little progress without failure. These guys quickly admit not only that they’ve had plenty of failures, but that they wouldn’t have what they do if it wasn’t for the screw ups. Unsuccessful people avoid failure at all cost. The successful ones embrace it, learn from it and keep building. If you’re not screwing up every once in a while, you’re not trying hard enough.
11. You don’t need to be able to do that many things right to succeed. In fact, success is inversely proportional to how many things you try to do. Do a few things really well. Focus on that. Hire others to do the rest or don’t do it at all. The most successful businesses and people have a much longer list of what they aren’t willing to do, than what they actually spend time on. Warren is notorious for how many things he’s says no to. Stay within your circle of competence. When in doubt, do less.
12. In business and in life, incentives make all the difference. Understand the incentives on both sides before engaging in a transaction. Most investment managers get paid for how much money they manage, not how much money they make you. Real estate agents are more encouraged to get your house sold as fast as possible than they are to get you the best price. Even the best natured of people can get lead astray by misaligned incentives. Align your incentives with the people you work with (clients, customers and partners) and you’ll get a lot more done, with a lot less frustration. Most importantly, only engage in activities that incentivize you to act in line with what you believe.
13. The first $200 billion is the hardest. The 2nd is relatively easy. The hardest part is starting. Achieve small victories, build momentum and watch what happens. The first time is always the most daunting, there are always more excuses and it certainly takes the most courage. But once you know it’s possible, it becomes your new normal. That starts with starting.
14. Purpose is the ultimate compensation. Job satisfaction and loyalty come from the autonomy to do the work that matters to you, not from a lofty salary or bonus. Every manager at Berkshire is independently wealthy, yet they can’t wait to come to work every day. “They get to paint their own paintings,” as Buffett says. Give people autonomy and trust to do things they are good at. Avoid micro-managing. Don’t think you can do their skill better than they can. Give them the paintbrush and freedom to build upon their vision and that’s what they’ll do. Daniel Pink has an excellent TED talk on The Surprising Science of Motivation.
The same goes for why Warren and Charlie, in their 80′s, have no interest in retiring:
“We get the opportunity to paint our own painting every day and it’s a painting that will never be finished. We love it.” – Warren Buffett
You can’t infuse passion into someone, but you can certainly create a system that takes passion out. When in doubt, give those around you the brush.
15. The most powerful investment is the one you spend on yourself. As Charlie puts it “Berkshire’s record would have been terrible if Warren didn’t keep learning.” These guys are crazy about going to bed slightly smarter than when they woke up. Read everything you can get your hands on. Learn from those around you. Be a sponge. Everything is a lesson. Despite all kinds of advanced formal education, Warren’s #1 diploma in his office is the one he got from completing a week-long Dale Carnegie Public Speaking course. You never know where you’re going to find the best nuggets. Just keep learning.
16. Be a student of other people’s folly. The first seven pieces of art on Warren’s office walls were the seven biggest financial failures of the past century or so. These guys study failure like a med student would study for the Boards. They absolutely refuse to take steps that have even the the slightest chance of leading to financial ruin. The more you learn about the brick walls others charged into head first, the more likely you are to avoid them.
17. Think huge. When Warren was in his 20′s, he told his wife that one day they were going to be incredibly wealthy (despite having no real wealth at the time). He wasn’t exactly sure when, but he was sure it was going to happen. He told her to prepare and think about what she’d do with a great deal of money. Then he slowly made $50 billion dollars. Have your vision of what you want your life to represent. Visualize, animate and create it in every part of your world. Give yourself something inspiring to build towards. Sketch out your castle in the sky – then start building the staircase to get there.
18. A brand is a promise. People all over the world buy a can of Coke over the generic options because they trust what’s inside. That it will be of the consistent quality they’ve come to expect. What promise does your brand represent? What do you want it to represent? What about yourself? Every one of us is our own brand. The things we say and do, the way we treat people – all of it is building our own personal brand. The promise that we will deliver to the world. Are you representing a promise that makes you proud?
19. Stop saving up sex for old age. This is my all-time favorite analogy. Working a job you hate, just to build up a resume to hopefully do something you enjoy later on, is just like saving up sex for old age. There is no sense in waiting. If you’re going to build your resume, then build it with things you enjoy, or better yet, take the steps to start doing things you are excited about, with people you admire, right now. There is no waiting. Happiness not spent today does not equal more happiness tomorrow.
20. The most powerful tools cost nothing. Last week we talked about how today it’s possible to build a meaningful business for less than a $100. You don’t need huge investors, you don’t need an Ivy League education, you don’t need a huge office or a bunch of employees. The most powerful and enabling tool required to run a passion-based business in today’s world is totally free: The Internet. So is most every other key ingredient… Meeting passionate people is free. Learning through books, studies and videos is all free. Hard work on something you love doing, is also free. Have you been embracing the tools that make what was previously impossible, possible?
Buffett recently mentioned how he’d give up his private jet long before giving up his Internet access. And who wouldn’t? But think what that means. A billionaire has access to every tool in the world, yet the most important is the one that all of us have equal (and free) access to. No one needs the jet, but we all need the information. We need the tools. Because the access is what makes everything possible.
Stop thinking you need something more to pursue a dream.
(via Live Your Legend)