Warren Buffett’s Top 10 Rules For Success
Warren Edward Buffett was born in Omaha, Nebraska. His father was a US congressman and his mother was a homemaker. He graduated from the University of Nebraska-Lincoln, and enrolled at Columbia University after having been rejected at Harvard. He received his Master of Science in Economics two years later, then attended the New York Institute of Finance.
He started reading about investing at the age 7 from books he read at the Omaha public library. At the age of 11, he bought his first stocks of 3 preferred shares of Cities Service. With a friend, he bought a $25-dollar used pinball machine and placed it in a barber shop. After several more machines in other barber shops, they were able to sell the business for $1200 later in the year. When he graduated from college, he has already accumulated about $9800. After working in several firms, he started his own company. At the age of 40, he was already the chairman and largest stakeholder of Berkshire Hathaway Inc.
The Top 10 Rules
Warren Buffett is an expert investor and business man. He is called the Oracle of Omaha for his sound business principles and profitable investments. He is ranked by Forbes as the #15 Most Powerful Person in the World in 2016, #3 in the 400 wealthiest persons in America, and the 2nd Richest Person in the US and the World. In his success, he has given a great number of advice, and this is a summary of the top 10 based on this YouTube video.
1. Find Your Passion
Warren Buffett, when asked about the secret of his staying power, he replied that people should find their passion. He recalled that he was very fortunate to find it when he was 7 or 8 years old. At a young age, he read the book One Thousand Ways to Make $1000 which he borrowed in a public library. He stated that he was greatly inspired and began his entrepreneurial activities. He advised students that they may not find it on their first job, but they should take the job that they would take if they were already independently wealthy.
2. Hire Well
He recommends to business owners who are hiring people to find 3 things in their future employees. They should look first for integrity, then intelligence and energy. Buffett jokingly explains that if the person you hired has no integrity, then you might preferred them to be dumb and lazy rather than smart and energetic.
3. Don’t Care What Others Think
Warren Buffett stated that it never bothers him when people disagree with him. He admits that there are many things he does not understand, and he tries to stay away from them. However, there are things that he understands well and he stays in this area he calls his circle of confidence. When people tells him that he is wrong on something, he just goes back to study the facts. He believes having emotional stability is important.
4. Read, Read, Read
He revealed that he likes to read, and reads about 5 to 6 hours a day. He stated that he reads at least 5 daily newspapers, a fair number of magazines, annual reports, and others. Buffett admitted that he has always loved reading, especially biographies.
5. Have a Margin of Safety
Warren Buffett is considered an expert in investing. He advised people to always consider having a margin of safety. In an analogy, he explained that a truck weighing 9900 pounds should take a bridge that has a load capacity of 20,000 pounds than a bridge that has a load capacity of only 10,000 pounds.
6. Have a Competitive Advantage
The nature of capitalism, according to Buffett, is that people, or competitors, will try to come and take your business, such as your customers or market share. In order not to be taken over, and to stay in business, you should have a competitive advantage. One of the best ways to be competitive is to be a low-cost producer. Another way is to have more talent, or better resources.
7. Schedule for Your Personality
Warren Buffett stated that he has a very unstructured working day. He does not like meetings, but he reads a lot. He is also on the phone a moderate amount of time. Since his businesses have their managers, they run by themselves. However, his responsibility is acquiring capital. And he states that he is fortunate enough to do what he really likes to do, and be with people that he really wants to work with. He believed that having that kind of working schedule is productive for him because it fits his personality and aptitudes.
8. Always Be Competing
Looking at history, Buffett stated that most businesses die because of complacency. To keep a business alive, he stated that owners should have that certain restlessness, a feeling that competitors are always trying to overtake you but you want to stay ahead. So people in their business should always be moving. Resting on your laurels is dangerous, even for leading companies. It is wise to have that competitiveness just like when the business was just starting, even when they are already doing very well.
9. Model of Success
Warren Buffett was inspired by a book written by Ben Graham. Although he had read other books about investing before, he was influenced greatly by the writings of Mr. Graham. He sought Graham, and even offered to work for his company for free. Buffett did work for Graham but earned a salary. He even named his second son Walter Graham Buffett after his mentor.
10. Give Unconditional Love
He stated that his father gave him the greatest lesson by showing him the power of unconditional love. He believed that it is one of the most powerful force, a precious gift that a parent can give their children. Buffett stated that any parent who can impart this kind of love to their children can transform them to excellent human beings.
Warren Buffett has remained successful as the leader of his profitable company for more than 40 years. He has surely become very influential to many people, but has remained humble in spite of his great wealth and success. He started The Giving Pledge and has pledged to give away at least half of his wealth over the course of his life. He invites other billionaires to do the same. He stated that he will leave his children only enough wealth “so that they will feel they could do anything, but not so much they would feel like doing nothing.” These rules are worth considering for a successful professional and personal life.