When Warren Buffett speaks, people listen.
He is, after all, one of the best investors the world has ever seen.
His quotes on investing are famous.
But what does he say about living a good life?
I believe you become a better investor by copying more than just his investing techniques. You’ll benefit from following his wisdom and life skills as well.
Why is that? You won’t have much success as an investor if the rest of your life is a mess, because you won’t be able to focus.
Apart from being an excellent investor, Warren Buffett is a wise man with nine decades of experience, and yes, he does have an opinion about how to live a good life.
I’ve collected seven of his most important snippets of wisdom that relate broadly to living life and not just to investing and making money. These seven pearls of wisdom have made an impact on my life.
Who knows…maybe they’ll change yours too.
1. Choose Friends You Like and Admire
“Make some good friends, keep them for the rest of your life, but have them be people that you admire as well as like.”
This is the most important piece of advice Warren Buffett has given the Microsoft founder Bill Gates. They have been friends for around 25 years, and you might be surprised that it’s this piece of advice that Bill Gates highlighted when Warren Buffett turned 90, because at first glance it seems a bit trivial for such brilliant minds.
But before your eyes glaze over this, do yourself a favor: think a moment about who your friends are and where you know them from.
Some you might know from school.
Some lived in your neighbourhood.
Some you know from university.
Some of them were friends of friends or colleagues.
You’ve probably chosen most of your friends because they happened to be there.
Do you admire them? Do you really like them?
Think about them one after the other.
This little piece of advice to choose friends you like and admire is important, and if you think about it, it’s also quite different from how most people go about friendship.
When I did this little exercise, I discovered to my own horror that I have some friends who I would consider unkind, and even some friends who display behaviour I can’t approve of.
I just didn’t really think that someone else’s behaviour was my problem. But it is.
“You will move in the direction of the people that you associate with. So it’s important to associate with people that are better than yourself. The friends you have will form you as you go through life,” Warren Buffett told Bill Gates.
If this is true about friendship, imagine what he says about marriage…
2. Marry the Right Person
Marrying the right person will be the single most important decision you make in your life, Warren Buffett says.
It’ll determine your destiny.
Warren Buffett’s first wife was Susan Buffett, with whom he had three children and a marriage lasting three decades.
Today he is married to Astrid Menk, to whom Susan introduced him before she decided to move to California to pursue a singing career.
Warren and his first wife remained married and friendly until she died in 2004 …despite the fact that they both had separate partners.
Before his first wife, Warren Buffett dated a woman who was an emotional whirlwind. She later married one of Buffett’s friends – a marriage that ended bitterly.
If Warren Buffett had married a person less kind and stable than Susan Buffet, if he had entered into decades of marital struggles, would he have been able to make the impact that he has? Would he have been able to focus?
“Marry the right person. I’m serious about that. It will make more difference in your life. It will change your aspirations, all kinds of things,” he said at Berkshire’s annual meeting in 2009.
3. Protect Your Reputation
Warren Buffett is all about avoiding losses and investing conscientiously.
Apparently, that’s also what he values in other spheres of his life.
“It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently,” he says.
His investing style is about considering data and avoiding rash decisions and emotional investing.
When it comes to living a good life, his style is similar.
He’ll extend himself far to avoid letting anger destroy his reputation or important relationships.
4. “You Can Always Tell Someone to Go to Hell Tomorrow”
This is something ABC Inc.’s CEO Tom Murphy told him more than 40 years ago, and according to Warren Buffett himself, it’s been one of the best pieces of advice he has received during his career.
“It’s such an easy way of putting it. You haven’t missed the opportunity. Just forget about it for a day. If you feel the same way tomorrow, tell them then — but don’t spout off in a moment of anger!” he has said in the book Getting There: A Book of Mentors.
Don’t risk all your wins on an emotional spur-of-the-moment. Just wait. Postpone your anger.
Whenever I find myself getting caught up in an emotion, I’ll take a deep breath and say “Mañana”.
5. Follow Your Inner Scorecard
“The big question about how people behave is whether they follow an inner scorecard or an outer scorecard,” Buffett has famously said.
What’s the difference?
If you follow an outer scorecard, you measure your success in things outside of your control, such as other people’s actions and opinions.
This could be striving for winning a prize, getting on the cover of a magazine, getting a raise or promotion – or even getting enough likes on social media.
Inner scorecard is about measuring your success by how you think you’ve done. Do you think you did a good job?
Can you be happy about it even if the boss doesn’t notice it?
I already navigated by an inner scorecard in my previous career as a journalist when I decided to stop worrying about front pages and nominations for awards and focus on the content of my news articles and the problems I helped disclose or solve. That was a reward in itself.
6. Go to Bed Smarter Than When You Woke Up
Learn something every single day.
Warren Buffett reads about 500 pages a day. He says he spends 80 percent of his workday reading.
He says knowledge is compounding.
“That’s how knowledge works. It builds up, like compound interest.”
I couldn’t agree more.
Maybe 500 pages doesn’t fit your lifestyle with a full-time job and kids.
Then make it 10 pages or 20 pages. But learn and study something every day. Consistency is key.
7. Invest in Yourself
Warren Buffett has framed a 100-dollar Dale Carnegie certificate in public speaking which hangs in his office.
He calls the course one of the best investments he’s made in his life.
He was afraid of speaking in front of people before taking the course. This is something you don’t notice today at all when he goes in front of big crowds or on TV.
If you lack knowledge in a certain area, go get the knowledge. Improve, train, get better. Get a good teacher.
There are only so many things you can learn from books. Courses – online or offline – will get you to the next level.
“By far the best investment you can make is in yourself,” Warren Buffett has said.
You are your most important asset. You earn the money and you make the investment decisions.
Honor that by upgrading your skills.
You can upgrade your investing skill set this very minute by downloading my free e-book Free Yourself here.