The 7 Lessons I Learned From Becoming Warren Buffett

A friend of mine recently told me to watch the HBO documentary, “Becoming Warren Buffett.” After watching it, it was very scary how alike he was growing up to our youngest son. Maybe we’re raising a future billionaire!

Watch a preview of the documentary here:

 

The 7 Lessons I Learned From “Becoming Warren Buffett

#1 Buffet’s breakfast is determined by the markets

I never would have pictured someone with as much money & that has lived so long, would eat at a McDonald’s on a regular basis. What was really funny was that each day during his five minute commute to work to his company, Berkshire Hathaway, Buffett would choose his breakfast (spending no more than $3.17) based on how the markets fared.

“I tell my wife, as I shave in the morning, I say, ‘Either $2.61, $2.95 or $3.17.’ And she puts that amount in the little cup by me here [in the car],” he says.

“When I’m not feeling quite so prosperous, I might go with the $2.61, which is two sausage patties, and then I put them together and pour myself a Coke,” he continues. “$3.17 is a bacon, egg and cheese biscuit, but the market’s down this morning, so I’ll pass up the $3.17 and go with the $2.95.” I actually laughed out loud as he was telling this story.

#2 Compound interest is amazing

Albert Einstein was once quoted, “Compound interest in the 8th wonder of the world. He who understands it, earns it…he who doesn’t…pays it.” What a great message for those in credit card debt.


It’s amazing to see just how powerful this principle is. I occasionally play around with a compound interest calculator just for fun. (yes, I know I’m boring). Go ahead and try it yourself if you haven’t in a while.

The documentary stated that most of Buffett’s wealth happened after he turned 50. This was mainly due to the solid foundations he put into place early into his 20’s, 30’s and 40’s.

#3 The ONLY diploma hanging on his wall

This fact actually caught me off guard. For someone that has accomplished as much as one of the richest people in the world: I assumed he’d show off a wall full of diplomas and certifications.

I was pleasantly surprised to see that both him and I share a common interest – our admiration for the late Dale Carnegie.


Early in his career, Mr. Buffett attended both the University of Nebraska-Lincoln and Columbia University after being rejected by Harvard (I bet they wish he was on their alumni list for donor support.

Funny story: He was trying to decide what business school to attend. He noticed the name of one of the professors that taught at Columbia University, Benjamin Graham, who was an author of a previous business book he’d read. He wrote him a letter & told him that he’d love to attend Columbia because he had great respect for him but had no idea he was still alive! The letter must have worked, because Buffett was accepted shortly thereafter.

Buffett knew that if he was going to accomplish his childhood goal of becoming the “richest man in the world,” he’d have to eventually give a few speeches.

“I was so terrified that I just couldn’t [speak in public],” he told his biographer Alice Schroeder.

“I would throw up,” he said. “In fact, I arranged my life so that I never had to get up in front of anybody.”

One day he noticed a small newspaper ad for a Dale Carnegie speaking course. Buffett trusted Carnegie, whose book “How To Win Friend and Influence People” changed his life.

 

He took the class, overcame his fear of public speaking and attributes it much to his success later in life. It if for this reason that it’s the ONLY diploma which hangs in his office.

#4 His ONLY rule in investing


He learned the rule of investing from the same Benjamin Graham mentioned above.

#5 Never stop learning


Not surprisingly, Buffett is an avid reader and still to this day reads over 5 hours a day. He claims that both reading and getting over his fear of public speaking has led to much of his success.

One thing that he impressed upon me was being an action taker. He states that the knowledge we learn from reading that’s NOT put into action is useless. Whenever I read books (3-5/month), I highlight the important parts. Immediately after reading one, I reread the highlighted parts to drive  home the important concepts.

The cool power of reading is that you don’t have to reinvent the wheel. It’s amazing what you can learn from someone else that has already done it. That’s the power of reading.

#6 Focus

Buffett told a story about having dinner at Bill Gate’s house. After dinner, Bill’s dad asked them to write down on a piece of paper what was one word to describe their success.

Guess what?They both wrote down the exact same word.

FOCUS.

It’s safe to say that both of these billionaires have this trait in common.

In the fantastic book, The One Thing, author Gary Keller (of Keller-Williams) stated, “To achieve an extraordinary result you must choose what matters most and give it all the time it demands. This requires getting extremely out of balance in relation to all other work issues, with only infrequent counterbalancing to address them.”

The power of focusing on one thing is HUGE. In a world of multi-tasking, single tasking is becoming rarer by the day. Focus on a single task at a time and you’ll be surprised by the results.

#7 Follow Your Passion

My wife and I were eating with friends recently that sponsor an annual scholarship for their son that passed away during a drowning accident in high school.

She had just finished reading some of the applications earlier that day and was appalled by many of the responses. Most would write something to the effect of, “I want the scholarship so I can go to college and get a job and make a lot of money.”

Too many kids these days focus ONLY on the money instead of their passion.

Warren dreamed up a good life for himself and made it a reality. He was good at investing and loved it, so he followed that. It became a passion. Now every day he gets to live out his dream. He claimed he felt like he wanted to “tap dance” to work every morning. He’s living his passion.

Buffett was lucky enough to realize from an early age what interested him and then said no to everything else. He focused on the “one thing.”

I recently learned that one of my new passions is doing this. Helping you guys to become debt-free and financially independent. I love it. You’re never too old to find your passion.

Bottomline

I hope you’ll watch the documentary if you haven’t already done so. I plan on rewatching it with my kids because I feel that many of his lessons would be instrumental for them.

 

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