My youngest son and I were going to have some quality time.
“Write down your 25 most important goals,” I said. Because that is the kind of stuff I do for fun on a Sunday.
No Legos. Goal Setting.
“Why?” he asked.
He is too little to understand, but between you and me: because I had remembered Warren Buffett’s two-list technique for goal setting and wanted to practice it.
I’ll explain in a moment how it works – or rather how it doesn’t work.
I just told my son the simple version:
“Just imagine a genie comes out of the bottle. What 25 things would you want to happen?”
But for you, the grown-up, here is the story behind it.
Buffett’s Goal Setting Exercise
The exercise for focused goal setting is well known.
The story first showed up with the blogger Scott Dinsmore, back in 2011.
Supposedly he had met someone who knew one of Buffett’s pilots.
It went like this.
Buffett asks his pilot to write down his 25 most important career goals. Then he asks him to circle the 5 most important.
Now the pilot has two lists.
The 5 he circled. And the 20 he did not.
The pilot says he will start on the 5 right away.
The other 20 he likes too, so he will get to them along the way, whenever he can.
Here Buffett stops him.
“No. You’ve got it wrong. Everything you didn’t circle just became your avoid-at-all-costs list. They get no attention until you’ve succeeded with your 5.”
The point is simple.
The 20 goals are not “later.”
They are exactly what steals your time from the 5 that matter.
There is a sad footnote, by the way.
The exercise did not go so well for Scott Dinsmore.
He died in 2015, in an accident on Kilimanjaro.
You cannot help but think: maybe Kilimanjaro should have been on his own avoid-at-all-costs list.
Then It Went Wrong
Okay, back to a cozy Sunday morning with my son.
My own goal setting quickly turned into a mess.
Half an hour later I was more confused than before I started.
“Take the boys to Disneyland” sat right next to “grow the fund to 100 million and beat the index.”
How do you weigh a trip to Disneyland against the fund’s return over ten years?
You cannot. And if I only kept the 5 most important, I would turn into a workaholic and never do anything fun with my children. I sat there puzzling over it.
How to Make It Work
Here is the problem. I had mixed everything together.
Short term and long term.
Personal and career.
Big and small.
All in one pile.
And that is exactly the trap. When your goal setting mixes timeframes and areas of life, you cannot compare the things.
You have to choose one area. And one timeframe.
Not “my 25 goals,” but “my most important career goal for the coming year.”
It dawned on me that I first have to find categories, and they are easy.
For me they are: my work (including the fund and content like this blog post), family, and my own happiness.
As my coach says: “If it does not either move the fund forward, help you raise the boys, or make you happy, it has to go.”
Under each category, I now make the two lists.
And they have to be made for the long term and the short term.
You zoom out, and you zoom in.
Only then does it make sense to choose the 5 and forget the rest.
A goal-setting exercise that mixes everything leaves you more lost than when you started.
Focus is the real secret of goal setting.
It is not writing everything down. It is choosing what you want to be good at, before you even start listing.
My Son’s List
And my son? Here is what he came up with, exactly as he wrote it.
1. Go to Cascais Shopping.
2. Go somewhere it snows for Christmas.
5. Get a new water bottle for Christmas.
6. Go to New York.
7. Disneyland.
8. Get Netflix back.
Yes, he skipped 3 and 4.
And no, he never made it to 25. Somewhere between New York and a water bottle he looked up and said:
“Mom, there’s nothing left in my brain.”
Maybe he was closer to the point than I was.
Most of us do not have 25 important goals.
We have a few that mean everything. And then a long row of water bottles.
The art is knowing the difference.
If you want to learn how Warren Buffett invests, you are welcome to download my free e-book here.
