Warren Buffet is one of the wealthiest men in the world and one of the most successful investors of all time. Dubbed the “Oracle of Omaha” due to his wisdom to invest in profitable companies, Buffet’s habits and lifestyle reflect strong personal principles that he feels built his success. Below are eleven lessons to create success according to how Warren Buffet lives his life.
1. Live below your means. Buffet attributes frugality to his ability to accumulate wealth and create stability, which can minimize financial stress in the future. For example, Buffet still lives in the modest home he purchased for $31,500 in 1958, despite today having a net worth of $39 billion.
2. Become comfortable with public speaking. Buffet believes the only way an aspiring entrepreneur can effectively build a business is by clearly communicating their vision. Buffet developed this skill by enrolling in public speaking classes.
3. Prioritize saving. Rather than saving what’s left at the end of the month, Buffet believes that a set amount of money should be the first thing taken out of every paycheck and put into savings. The remaining money can be used for paying bills and spending.
4. There’s a difference between price and value. Buffet holds value in a higher esteem than price. Items with a higher value last longer than purchasing cheap items with a bargain price. Often a person will find themselves paying more in the long run to replace cheap items over time.
5. Your reputation has immeasurable value. Buffet warns against a person damaging their reputation in pursuit of money. Opportunities to make money will happen again, but harm to a person’s reputation or a business’ reputation may be irreversible.
6. Surround yourself with the right people. Buffet encourages people to hang out with others who have similar goals and are successful. It’s motivation to work harder and be better.
7. Read more. Buffet claims that a huge part of his success is due to his reading habits. He estimates he reads about five hundred pages a day. He says that knowledge works like compound interest and helps him to make wise investments.
8. Stay away from trendy investments, especially in technology companies. No matter how alluring the new companies’ stocks may be, Buffet warns that eventually, something new and improved will come along. Rather invest in companies that show long-term, consistent success.
9. Work smarter, not harder. To Buffet, time is extremely valuable. He is known for sending out letters to his businesses to discuss goals and give praise, rather than in-person meetings. Buffet believes this allows time for everyone in his companies to be more productive.
10. Never invest in something you don’t understand. Buffet researches extensively prior to investing. He prefers companies that run simply to companies with more complex structures. He also takes into account the character and honesty of a company’s management team.