Warren Buffett’s Partner Teaches 12 Steps To Financial Freedom

Jorge Paulo Lemann, the richest citizen in Brazil, isn’t exactly a household name, just not yet. But he controls some of the biggest brands in the world, and I am sure you and many other consumers are quite familiar with them. Along with his partners, Lemann is in charge of some of the biggest brands such as Heinz ketchup, the whopper and Budweiser beer.

Recently, when partnering with billionaire investor Warren Buffett, Lemann made headlines once again. This time he made headlines for being part of the largest deal in the history of the food industry. I’m talking about the $23 billion acquisition of Heinz.

Warren Buffett was very excited to partner with Lemann, saying “this is my kind of deal in my kind of partner… I want to learn more about Brazil and Jorge [Paulo Lemann] is a great professor,” said Warren Buffett in an interview with Brazilian Magazine EXAME.

In 2011, a speech to students was organized by Jorge Paulo Lemann’s foundation, Estudar, which provides young Brazilian students with merit-based colleges looking to study in universities such as Harvard. Lemann is an intensely private individual, and often a media-shy billionaire worth $17.8 billion. In this speech he reveals 12 principles that brought him to his own financial success. They are:

1. Dream Big.

“I always say, to have a big dream requires the same effort as having a small dream. Dream big!”

“Maybe I was accepted to Harvard only because of my tennis skills since I definitively had no great academic achievements. I was 17 and only thought about surfing and playing tennis. I had almost never left Rio de Janeiro and had never been to the United States. Suddenly, I was at Harvard, that place so full of ideas. In my freshman year, I was forced to read Plato and Socrates. I was learning things I had never even heard before. Up to that point my biggest dreams were to surf bigger waves or win a tennis championship.”

Jorge learn that it was important to shoot for the stars, just like many of the other students were doing while attending Harvard.

2. Choose partners well.

“The three short years I spent at Harvard, where I lived with excellent people, taught me not only that I must know how to choose my partners but also that choosing excellent partners is a skill you can learn. Obviously, when you spend time with the best, you learn how to choose among them.”

Lemann recognizes how important it is to be among the best. During the 1990s, he was chair of the Latin American advisory board of the New York Stock Exchange, and he was also nominated to the board of Gillette, the razor maker, where he met Warren Buffett.

While at Banco Garantia, Jorge worked with Marcel Herrmann Telles, who began as a trainee at the company, as well as Carlos Alberto Sicupira, and individually met while he was surfing in Rio de Janeiro. This trio soon became inseparable and have been making major transactions together ever since.

3. Develop your own long term vision.

“In our bank Garantia we [Lemann, Sicupira and Telles] developed the basic ideas that are part of every single business we engage in. Some of the decisions we made, such as leaving financial companies and buying industrial/commercial companies, [like Burger King and AB Inbev, Budweiser makers] were based on the vision we set up 20 years ago.”

The things you do today will have affects many years to come. Do not limit yourself with short-term decisions. Great ideas will have a much bigger effect than any temporary fact.

4. Always try to get better. You can always improve.

“You have to be always trying to do something better, or improve yourself all the time.”

Does this seem a little bit overwhelming to you? Well, it might be better if you focus on the first three principles in the beginning. Things will get a lot easier once you are in the habit of constantly improving on your big dream, and you surround yourself with the right people and obtained a long-term vision.

5. Develop your own method to achieve the results you want.

“Look at the four or five essential points of any issue. I’ve always tried to nail questions down to what is essential. Most of our companies have a maximum of five goals and employees working for us also have 5 personal objectives.”

“I developed a system for choosing new classes [at Harvard]. I interviewed former students and professors before signing up for any classes. I also found out that previous exams were available in the library. Soon, I realized that professors usually repeat their questions. This methodology allowed me to know exactly what I would learn before signing up for any class.  It also helped me to change my status from one of the students with the worst grades to a top student while taking six or seven classes per semester instead of only four as most of my peers. I graduated when I was only 20 and was on the dean’s list.”

6. Simple is always better than complicated. Be careful with too much theory.

Einstein once told us: “If you can’t explain it to a six year old, you don’t understand it yourself.”

Try your best to look for simplicity, and also do your best to explain things in a very simple way.

7.  Ethical behavior is the best long-term strategy.

“I have learned that the ethics of the so-called markets can be different from what we learn at school. In day-to-day life you have stimulus to behave unethically, but in the long term it always pays off to be ethical.”

“There are some basic principles that are embedded in every company I have a stake in.”

8. Meritocracy

If you perform the best then you should certainly be rewarded the best.

9. Ownership: It is fundamental to have partners. Always work with people who are also owners.

Retaining talent is an incredibly hot topic in this day and age, and that’s especially true with businesses of all sizes. It doesn’t matter if it’s a start up or a multinational organization. If you look at principles eight and nine, it’s obvious that they go together.

To put it simply – it’s important to surround yourself with the best people. But it’s important that the best people want to be with you and work with you as well. In order to keep the best close to him, Lemann chose to imitate the same method of Goldman Sachs by rewarding his best executives at bank Garantia with company shares of stock.

10.  Take risks.

“A lot of people study too much, but to do the exceptional you need to take risks.”

“You need to do more than only study. When I was on vacation from Harvard, I would go back to Brazil and enjoyed my summer break playing tennis and surfing. I was always looking for the biggest wave.”

“Every two or three years there would be a storm and some huge waves would show up on Copacabana beach. We were used to surfing only 3- or 4 meter-high waves, but those were at least three times higher. My friends knew it was almost impossible for me to surf such huge waves, but I decided I would do it. I went for it and experienced the maximum adrenaline ever; I felt blood running fast all through my body.”

“For me that was enough. It was dangerous, too dangerous. I mention this story because I think that in life it is important to take some risks. In college we usually don’t learn how to measure risks, we only learn theoretically, but in general college teaches you not to take risks. However, in life, you have to risk.”

Here are some other excellent quotes about risk:

He who risks and fails can be forgiven. He who never risks and never fails is a failure in his whole being. – Paul Tillich

If you are not willing to risk the unusual, you will have to settle for the ordinary. – Jim Rohn

It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win. – John Paul Jones

11. Know thyself.

Make sure you focus on what you do best. You need to focus on your main strengths.

Is the opportunity there for you to do your best each and every day? Do not let your natural talent go to waste. We all have our own unique combination of personal skills and capabilities. Do not spend lots of time working on your weaknesses or looking for shortcuts. You need to develop your strengths instead.

You’re not going to be everything to everyone. The best way to achieve excellence is to do what you do best for the majority of the day.

12. Get your hands dirty

“The best way to learn anything is by doing it.”

Lemann ended his speech by reminding us of the importance of being among the best, and he said, “I am ready to help, on one way or another, anyone who was accepted to Harvard.”

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