According to billionaire investor Warren Buffett, he recently chose Howard Buffett, his son, to take over as chairman of Berkshire Hathaway when he finally retires.
You might wonder why Mr. Buffett picked his son to take over as the chairman of the company. Was it preferential treatment? Was it laziness? It was neither those things. As a matter of fact, Buffett had a great reason to make this decision.
His son Howard is a philanthropist, a farmer and he’s also served on Berkshire Hathaway’s Board of Directors for the past 20 years. So, for the last two decades, he’s sat in on all of the meetings relating to the company. He was part of all of the biggest decisions. And when he takes over as chairman, he will be able to make sure the Berkshire Hathaway culture stays the same once his father is finally gone.
When something works, you should stick to it.
By putting Howard Buffett in charge, his father is showing the world that Berkshire Hathaway’s way of doing things is not going to change after he gone. Who would know how Berkshire Hathaway operates better than Warren Buffett’s own son? He’ll be able to preserve the culture of the company while helping the Berkshire Hathaway conglomerate grow. That would be very difficult for an outsider to handle.
Howard Buffett received the greatest apprenticeship you could ever ask for. He was able to sit in on everything happening at Berkshire Hathaway, and he observed it all. Howard was part of the most monumental decisions regarding Berkshire Hathaway, and he made them along with his father and the Board of Directors. Some of the decisions they made were: buying Burlington Northern Santa Fe Railroad, the recent acquisition of Heinz and having the foresight to invest in Goldman Sachs while the financial market was in the toilet.
How Can You Give Your Own Family an Advantage Similar to the One Buffett Provided His Son?
If you plan to achieve success, you’ll do so by putting forth a compounding effort over a period of time. That’s why it’s ideal for your children to leverage their effort and time as efficiently as possible. They need to stay focused on a specific area if they plan to become an expert in that field.
Your children will benefit tremendously, and have a serious advantage, if they learn something and know it better than everyone else. It’s important that they stay focused in one specific area where they will have a tremendous advantage over all of the others.
Think about Howard Buffett for a moment…
He’s accumulated a tremendous amount of knowledge over the last 20 years while he watched his father choose investment opportunities. It’s a major advantage to learn something better than everyone else.
It takes a long time to develop the right contacts. It may even take longer to develop trust in the marketplace. Plus, it takes time to learn through experience how to hone your instincts and hunches that will provide real world value in your real life. It will also take time to learn how to work with people. Lastly, it takes time to learn how to use all of the acquired knowledge, insights and hunches and turn them into an opportunity that your experience will provide.
This is more than just a nice way of doing things.
It’s extremely important to your family’s wealth and well-being. If you have a family business, a motivated member will be a great asset. They will bring the right relationships and continuity to the family business.
If your children understand how to run the family business better than anyone else, then they would naturally be the greatest choice to take over the leadership positions within the company.
They have been already established as an expert in the company. They know how to leverage the family business and they are already a part of a trusted team.
It makes sense that family members are in the best position to make use of the advantages because they grew up around the business. They know all of the people involved. They’ll have an easier time learning the business secrets because they are proactively being taught to them.
What If Money Were No Object?
In order for this to work, your children (and their children) need to have an affinity for the family business. If they don’t love it as much as you do, or they don’t have an aptitude for it, they may want to focus their time and talent elsewhere.
Your children should focus on the things they love, as if money were no object. Because here’s what normally happens…
If you pursue a skill to the point of mastery, the money will typically tend to follow. Your kids will be motivated to work longer, spend more time in the field and really stick it out because they are passionate about it.
Having family money is a great way for children to find their passion. But you have to use the money to help them instead of hurt them. There are a lot of options available when you have family money, and it could also lead to lots of distractions. It’s important that the family members are using the money correctly; instead of using this money to harm themselves when it should help them. You wouldn’t want to see your children become spoiled brats. There’s potential to use this money to distract themselves by only choosing hobbies instead of working hard, and this could lead to feelings of sadness, bitterness and uselessness.
You never want your children to feel like they could’ve had their own success if money didn’t get in the way. When Warren Buffett’s son Howard began farming, his father purchased land for him in Tekamah, Nebraska, but he didn’t give him the land outright. He made him pay rent. Warren Buffett did not give his son a free ride. This was a good thing, because Howard is now ready to take over as chairman of one of the richest companies in the world.
If you have children working outside of the family, it’s good to have them provide progress reports in regards to their success. This is especially true if they are using family money. It’s only natural that they would keep everyone abreast of how things are going. Find out what goals they are trying to achieve. Learn about the steps they are taking in order to achieve them. Asking simple questions will keep your children on track and heading in the right direction.
It’s important that your children focus once they figure out what it is they want to do. They must do the work in order to become experts in their chosen field. It’s a great way to become confident, successful, as well as independent. It’s important that any family money being offered will help them achieve this. Don’t allow family money to turn your children away from success.