This article was originally published in May 2015 on LinkedIn.
I’ve covered business for more than 20 years, writing articles for Fortune, Forbes, Bloomberg, Money, Fast Company, Time, The New Yorker and The Economist. Along the way, I’ve interviewed countless billionaires, many legendary investors, and the CEOs of some of the world’s largest companies. But in all those years, no business figure has fascinated and obsessed me as much as Warren Buffett.
Fifty years after taking charge of Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B), Buffett reigns supreme as the greatest investor in history, with a personal fortune of $70 billion. Berkshire’s latest annual report says its market value has soared by 1,826,163 percent under his leadership—an astonishing feat that boggles the imagination.
Buffett and his brilliant partner Charlie Munger are central figures in The Great Minds of Investing, a new book that I’ve written and edited, which will be published on May 29. It features profiles of 33 famous investors, along with portraits by Michael O’Brien, who has traveled all around the world over the past five years to take stunning photographs of Buffett, Munger, and the other investors in this book. Many of the great investors I interviewed for the book spoke of Buffett with awe. For example, Mohnish Pabrai told me that discovering Buffett changed his life, inspiring him to embark on a 30-year “game” in which his goal is to turn $1 million into $1 billion by following what he calls Buffett’s “laws of investing.”
If you want to get fabulously rich, it clearly pays to study Buffett. But what’s extraordinary to me is that Buffett’s wisdom goes so far beyond business and investing. Here, then, are ten of my all-time favorite insights from Buffett on how to build a successful — and happy — life.
“Unconditional Love Is Huge In This World”
In his profile for The Great Minds of Investing, Buffett speaks candidly about the most important reason for his success: the love and support he received from his father, Howard Buffett, a U.S. Congressman whom he revered. “My dad believed in me,” Buffett explains. “What I basically got from my father is unconditional love. Unconditional love is huge in this world… Whatever I did, he was all for it. It didn’t matter how much money I made or anything like that. It was just, ‘Do your best in whatever you take on.’”
“I Don’t Work To Collect Money.”
In the same profile, Buffett remarks, “I don’t work to collect money. I work because I love what I’m doing.” Speaking of his vast fortune and why he will give most of it away to the Bill & Melinda Gates Foundation, he adds: “I have no use for it. Society does have a use for it. And it so happens that I’m in a business where lots of money comes in when I do it right.”
Buffett has never cared about luxurious possessions, and he still lives in the modest house he bought for $31,500 in 1958. Last year, I made the pilgrimage to Omaha for Berkshire’s annual meeting and was particularly struck by Buffett’s public discussion of how little his fortune contributes to his happiness. “My life would be worse if I had six or eight houses,” he said. “It just doesn’t correlate.”
What money has bought Buffett is the freedom to live as he chooses. In The Great Minds of Investing, Charlie Munger explains: “Neither of us wanted to be a lowly subordinate in some dominant hierarchy that told us what to do and what to think. That’s why we got the money primarily—because we wanted the independence.”
“Live Your Life By an Inner Scorecard”
Buffett illustrated this by asking: “Would you prefer to be considered the best lover in the world and know privately that you’re the worst—or would you prefer to know privately that you’re the best lover in the world, but be considered the worst?”
“Hang Out with People Who are Better than You”
“You’ve Got to Keep Control of Your Time”
During their charity lunch, Buffett showed Pabrai and Spier his diary, which was mostly empty. By contrast, he told them that his friend Bill Gates manages his calendar with total precision: it features maniacally detailed entries such as “6:47 shower” and “6:57 shave.” Buffett has designed his life so his own schedule is blissfully uncluttered, leaving him to spend much of his time reading and thinking without distractions.
As Buffett once put it: “You’ve got to keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” Or, as Pabrai told me: “Warren cuts out a lot of crap.”
“It Takes Twenty Years To Build A Reputation And Five Minutes To Ruin It”
Gayner adds: “Sometimes, people can build great careers and enjoy great successes for a period of time through bluster and bullying and intimidation and slipperiness. But that always comes unraveled… The people you find that just keep being successful year after year after year… are people of deep integrity.”
Buffett, who treasures his reputation for integrity, once told his son Howie: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.”
“Stick Within Your Circle of Competence”
This intense focus on playing to his strengths — and largely ignoring everything else — lies at the heart of Buffett’s success. He once remarked: “You have to stick within what I call your circle of competence. You have to know what you understand and what you don’t understand. It’s not terribly important how big the circle is. But it’s terribly important that you know where the perimeter is.”
“Predicting Rain Doesn’t Count. Building Arks Does”
Buffett’s enduring success is built on one remarkably important concept. He once declared: “We believe this margin-of-safety principle, so strongly emphasized by Ben Graham, to be the cornerstone of investment success.” In a 1995 speech, he explained that having a “margin of safety” means “always building a 15,000 pound bridge if you’re going to be driving a 10,000 pound truck across it.”
As I see it, this principle really applies to any endeavor in life that involves risk. I found myself explaining this to my teenage son last week while teaching him to drive: “Henry, you have to turn your head and look before you change lanes. It’s not enough to glance in your mirror because there could be a car in your blind spot. Remember what Buffett says: you always need a margin of safety.”
Even for Buffett, lasting success depends not just on talent, hard work and a scarily high I.Q., but on preparing for adversity. As he once put it: “Predicting rain doesn’t count. Building arks does.”
“Nice People Come In All Colors”
“The More You Give Love Away, The More You Get”
I’d like to end with my absolute favorite Buffett quote. His late wife, Susan, was a famously kind and loving person, and he has often said that marrying her was the most important decision he ever made. When Susan had cancer, he visited her in a hospital in San Francisco, then flew to Georgia to speak with a class of college students. According to Alice Schroeder’s book, The Snowball, the students asked him about his greatest success and his greatest failure.
Buffett replied: “When you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you. I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.
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