Warren Buffett Lessons: Warren Edward Buffett is an American investor, business tycoon, philanthropist, and one of the most successful investors on the planet.
Wondering how he managed to become one of the wealthiest and most influential people in the world?
You’re in the right place…
Today, we are going to explore Bounce Mojo’s take on 10 Lessons for Success you can learn from Warren Buffet.
We will be covering:
- Buffett’s very early start in entrepreneurship
- How he went from a hopeful young professional to a muli-billionaire
- Words of wisdom from one of the wealthiest men alive
- How to dodge business failures…
- and more!
Though he came from a well-off family, Warren became very interested in entrepreneurship and business since he laid eyes on a book named “One Thousand Ways to Make $1,000” when he was just 7 years old.
Ever since then, the boy was unstoppable.
Today, this clever little man is worth over $85 billion and he’s not resting his laurels yet!
So without further ado, let’s dive right in!
1. Read Everything
Warren Buffett Lesson 1: I just read, and read, and read.
Warren Buffet is infamous for his reading habit. He believes that a great deal of reading can keep us from making impulsive decisions that could negatively affect our lives and career.
….the man suggests to anyone who wishes to achieve similar success as him to read as much as 500 pages a day!
It was also reported that Warren spends about 80% of his day reading and thinking.
And if you’re wondering if this man ever runs out of things to read…
“I probably read five to six hours a day. I don’t read as fast now as when I was younger but I read five daily newspapers. I read a fair number of magazines. I read 10k. I read annual reports and I read a lot of other things too. I’ve always enjoyed reading. I love reading a biography.”
Warren even said that reading operates on the power of compounding interest. That is how knowledge builds up, all while keeping you from making impulsive decisions.
While not all of us speak accountancy, I think we get how it helps. Copy that, Warren!
2. Have Emotional Stability
Warren Buffett Lesson 2: Have Emotional Stability
You know what’s better than a Master’s degree and certificates according to this legendary investor?
In the world of stocks and investments where things can change faster than you can say market crash, it’s emotional stability that will be your best weapon.
You know why?
Investors go through a lot of ups and downs in the market and most people, however long they have already been in the business still panic whenever challenging times come.
And we know how panicking brings nothing but bad decisions.
This can also be applied wherever business you may be. As Warren Buffett excellently put it:
“It never bothered me if people disagreed with what I thought as long as I felt I knew the facts. There’s a whole bunch of things I don’t know a thing about, I just stay away from those. So I stay within what I call my circle of confidence, you know. Tom Watson said it best. He said, “I’m no genius but I’m smart in spots and I stay around those spots.” Well, I try to stay around those spots and I just don’t have a problem if somebody says you’re wrong on something.
“I go back and look at the facts and I think that really is much more important, frankly, than having a few points of IQ or having an extra course or two in school or anything of the sort. You need emotional stability.”
3. Hire The Right Team
Warren Buffett Lesson 3: Hire The Right Team
There is Warren’s genius to thank for his legendary career. But he wouldn’t have done it all without a great team behind him.
If you’re managing an empire, you need not only smart people working alongside of you, but honest ones with faultless values.
In case you’re wondering…
…how does Warren Buffett choose his people? It is fairly easy to impress nowadays. So what is his standard?
“We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity.”
Among these three traits, the big boss emphasized the importance of integrity, saying “ …if they don’t have the latter (integrity,) the first two will kill you because if you’re going to get someone without integrity, you want them lazy and dumb.”
So what’s the takeaway?
Nothing beats having a genuinely great team behind you whose loyalty lies in the company and hopes nothing but the best for it.
4. Find A Competitive Edge
Warren Buffett Lesson 4: Find A Competitive Edge
This is where Warren Buffett’s famous term “economic moat” comes in.
As we all know, in medieval castles, the moat serves to protect people and riches inside from outsiders and intruders.
Just like a moat…
…your very own competitive edges can protect you and your business from sinking low and being outperformed by your competitors.
There can be many competitive advantages, but the greatest of them may just be a low-cost advantage.
A fine example is having access to the cheapest raw materials available. As Warren put it:
“Capitalism is all about somebody coming and trying to take the castle. Now, what you need is a castle that has some durable competitive advantage, some castle that has a moat around it…And that moat, that’s one of the best moats, in many respects, is to be a low-cost producer.”
Let me tell you something.
The legendary investor added that sometimes, the moat is just having more talents.
5. Have A Safety Net
Warren Buffett Lesson 5: Have A Safety Net
If there is one thing business-owners and even career men and women fear, it’s the unexpected.
Unexpected inflation. Unexpected bankruptcy and the likes.
Warren Buffett himself is no stranger to these things.
But while most investors and entrepreneurs struggled to keep everything together in times of crisis, Warren is not without preparation.
As a matter of fact…
….his simple trick is to not give your all when investing in something.
He calls it his safety net or margin of safety.
Take this example from the man himself:
“On the margin of safety, which means, don’t try and drive a 9,800-pound truck over a bridge that says it’s, you know, capacity: 10,000 pounds. But go down the road a little bit and find one that says, capacity: 15,000 pounds.”
This is because nobody is perfect. Even Warren himself can make mistakes and miscalculations. That’s why he always aims to invest with an entry price that is much lower than his value estimate for the company.
…it limits the losses in case there are miscalculations in his business analysis and assumptions.
6. Work On Your Biz, Not In It
Warren Buffett Lesson 6: Work On Your Biz, Not In It
If you’re thinking that to be able to succeed, you have to hustle day and night with a packed schedule not allowing any chill time, well, Warren wants to change your mind.
As opposed to popular belief that billionaires are unhappy people with nary a time for themselves, Warren actually calls the shots in his life and business.
In an interview, the billionaire tycoon emphasized how having your own pace that fits your personality can take you and your business to unimaginable heights.
Let’s take it from the master himself.
“You’d be surprised at my days, they’re very unstructured. No meetings, none. I don’t like meetings. I read a lot. I wish I were a faster reader so I get more done but I do read a lot. I’m on the phone a moderate amount. Our businesses run themselves…”
So how is that helpful?
“We really get to do what we like to do, the way we want to do it with people that we choose to be around and they’re terrific. We’ve really got everything our way and we’re very fortunate and my guess is that we’re each the most productive in that particular mode, too – because it in his world, he has a different kind of pace than I have but we both love it the way we do it, because it fits our personalities and aptitudes.”
So here’s to a chill and laidback boss!
7. Be Restless
Warren Buffett Lesson 7: Be Restless
Warren Buffett loves History.
Well, not really History, but he likes studying the history of businesses, especially their failures just so that it won’t happen to him.
And do you know what kills a good business or career?
You’ve guessed it. Complacency.
Many people make the grave mistake of how when you see how your business is growing and you become complacent and relaxed, thinking it will go as well all the time from now on.
That is why the legendary investor maintains that being restless will keep your boat afloat.
“You want a restlessness, a feeling that somebody’s always after you – but you’re going to stay ahead of them. You always want to be on the move. When you’ve got a great business, like Coca-Cola – wishes there aren’t any like Coco but the danger would always be that you rest on your laurels. That restlessness, that belief that tomorrow is more exciting than today you just have to have it permeate the Organization.”
Guess there’s no resting of the crown for the old man anytime soon!
8. Act Like You’ve Made It
Warren Buffett Lesson 8: Act Like You’ve Made It
These days, young people choosing more practical courses over what they love doing is nothing new.
I mean, any success-minded student would choose Business Administration over Fine arts any day, right..?
Listen to this billionaire and follow your passion.
Warren says act like you’ve already made it.
“You’re lucky in life when you find it and you can’t guarantee you’re gonna find it your first job out but I always tell college students to take the job that you would take if you were independently wealthy. You’re going to do well in it.”
He went on to say that if you’re thinking that making 20x is the answer to everything in life, you’re making a mistake.
Suffice to say…
…if you’re doing what you truly love, you will surely do very well in it. And that is how success come about.
9. Power Of Unconditional Love
Warren Buffett Lesson 9: Power Of Unconditional Love
Now all these tips may be unbeatable in their effectiveness, but Warren Buffett maintains that nothing is greater than this one thing:
If you think that’s cheesy, listen to one of the greatest analysts in the world explain how unconditional love will give you the greatest returns in life.
“Basically, the biggest lesson I got, in a sense, is the power of unconditional love. I think there is no power on earth like unconditional love and if you offer that to your child. I mean, you’re 90 percent on the way home and there may be days when you don’t feel like it…it’s not I’m (sic) critical of, that’s a different animal, but to know you always can come back…I mean that is huge in life that takes you a long long way and I would say that every parent out there that that can extend that to their child at a very young age – it’s going to make for a better human being”
In his biography, Buffett concludes that the greatest measure of a person’s success in life is not how much money they have made but how much they are loved.
“The only way to get love is to be lovable. You’d like to think you could write a check: I’ll buy a million dollars’ worth of love. But it doesn’t work that way. The more you give love away, the more you get.”
10. Model Successful People
Warren Buffett Lesson 10: Model Successful People
Warren started reading financial books when he was just 7 and he started investing at 11 years old.
But did you know?
It was just all for fun for little Warren. Although he was already business-minded at that young age, when it comes to investing in stocks, he was not really grounded in anything.
…he met the greatest mentor in his life, investor and economist Ben Graham.
Man practically followed him everywhere, from Columbia University to GEICO insurance upon learning that Graham was a board member.
Fortunately for him…
…the path he took in following his idol is also a path to success. Just imagine if he did not have Ben Graham to admire and follow, the world won’t have Warren Buffett, as well.
In turn, Warren learned a lot from his mentor and they even shared a partnership later on. As a token of appreciation, Warren named one of his children Howard Graham.
“He was a marvelous man, never expected anything from me in return. Ben Graham in his little teens looked around and he looked at the people he admired and he said you know I want to be admired so why don’t I just behave like them. He found there was nothing impossible about behaving like them and similarly, he did the same thing on the reverse side in terms of getting rid of those qualities.”
So what’s the big takeaway?
Having someone to look up to and take after is great especially if you found yourself feeling clueless as to what to do next.
After all, no man is an island and we all need inspiration.
Conclusion: <br>Top 10 Warren Buffett Lessons [For Success]
Warren Buffett might be one heck of a billionaire, but it is undeniable that the man has the perfect balance of heart and mind.
Only goes to show that you don’t need to be stiff and stern to be a success.
My favorite thing about this legendary investor is how he is still super frugal even when he can afford just about anything in life.
How about you? Tell us and share your most favorite success lesson by tweeting us!
Put the Bounce in your Mojo today!