We can all remember studying for a test in school. The stress and work of having to cram all the lessons into your brain before the exam is never fun. During college I use to stay late in the library studying for test as it offered a place to concentrate. I recall the security guard telling me it was time to leave around 2 am. At the time I would have told you that once college is over, my ‘nose in the books’ day would be over after I got my diploma. But a number of years ago, I realized something. I love learning. We all do. It just needs to be on a topic of interest and on our own terms, preferably without the arduous task of being tested on the subject.
Just about every Saturday morning you can find me at the gym. As you know by now I love efficiency. So while I am on what my wife and I call, “the death machine,” I watch youtube videos on whatever topic I am learning about at the moment. For a while I was watching presentations by various investors and stumbled upon a written interview on Warren Buffet. There was one short answer, reprinted below, that I found to have four amazing pieces of advice.
Interview is from Feb 27, 2015
What is your personal definition of ‘success’? How has it changed over the course of your career?
Answer (Warren Buffet):
The saying goes that success is about getting what you want, while happiness is about wanting what you get. For myself happiness is more important. My goal was always financial independence; working for myself and finding a job where I admire the people I work with. I was interested in being in a position to control the decision-making process. At age 25, I had enough money to live off of. I had two children and the equivalent of roughly $2M in today’s money. Everything since then has been surplus.
As you move along in your career, you always want to consider your inner scorecard – how you feel about your own performance and success. You should worry more about how well you perform rather than how well the rest of the world perceives your performance. The success of Berkshire has always been more important than my own personal success in terms of financial returns. The most important takeaway is that you should always try to be a good person.
Lesson One – Happiness
For myself happiness is more important.”
Here is one of the richest men in the world. He wants for nothing, yet he prioritizes happiness. Now my first reaction is that of course he prioritizes happiness, it’s one of the few things he can’t buy. If I had tens of billions of dollars and didn’t have to work I would only be concerned about being happy as well. Isn’t that what retirement is all about? But I would like to introduce you to a new way of thinking that I learned from the book, “The Happiness Equation: Want Nothing + Do Anything=Have Everything,” by Neil Pasricha. It’s a simple concept that’s contradictory to how most people, including myself.
Change the equation of:
Great work->Big Success->Be Happy
Be happy->Great Work->Big Success
Why do people associate with working hard, achieving some goal, then being happy? It’s not hard to know why, it’s what we are taught. Work hard, make lots of money, then retire and be happy. But, why wait to be happy? Just be happy now. Not only is being happy fun, but it can also better help us achieve our goals. While good hard work will make you successful, being likeable will surely make it easier to get a job or a promotion. People like to be around happy people.
Warren Buffet FIRE’ed (Financial Independence, Retire Early) before the phrase was coined. At an incredibly early age of 25 he accumulated two million of 2015 dollars, that’s impressive. Then again, that’s what one would expect from one of, if not the greatest investor of our time.
As we know Mr. Buffet did not sit on a beach at the age of 25, he kept working at something that he loved. He ran his own partnership for 13 years then eventually kept on investing by building his conglomerate under the failed textile company, Berkshire Hathaway. But the lesson here is that he did not retire. He kept working at something that he loved under his own terms, and that is the definition of Financial Independence, to do something that you love without money being the motivating factor. I’ve read a biography on Warren Buffet and he views his wealth a scorecard in gauging how much he is beating market returns and compounding his and shareholders money.
Competing Against Yourself
You always want to consider your inner scorecard – how you feel about your own performance and success.”
I interpret this ‘inner scorecard’ phrase as the stoic principle of competing against yourself and not others. By benchmarking your success on your own performance, you are eliminating external factors that are not in your control. There will always be someone who is more successful than you but use those people to your advantage to learn from, not as competition. If you are pleased with what you achieve than that is all that matters. By pushing yourself to your own set of metrics you will not only get better but you will be happier for it with less anxiety.
Being a Good Person
And the last lesson from these short two paragraphs is all that matters is being a good person. One would think that the most successful investor is shrewd yet that is not the case. From following his career by reading through his annual letters Berkshire Hathaway will not participate in a hostile takeover. By being in an amicable acquisition Mr. Buffet is not only being a good investor by ensuring that the acquired company will work with him and continue its success, but he also being a good person. As he has said many times, it takes a lifetime to build a good reputation but only 15 minutes to ruin it.
Warren Buffet is famous for using the front page of a newspaper as his ethical yard stick. Every action should be determined by asking yourself, would you be OK have this on the front page of the news? At the end of the day, your most important question is how will you perceive yourself after taking that action. Will you view yourself as a good person.
There are numerous lessons to learn from Warren Buffet. I began reading Berkshire Hathaway’s annual letters hoping to become a better investor. What I was not expecting was that greatest lesson I learned from him is on how to be a good person. To always be honest and that your reputation is paramount above all else.