7 Habits of Warren Buffett Or How To Make a Billion Dollars
“Chains of habit are too light to be felt until they are too heavy to be broken.” — Warren Buffett
“Just imagine you could be given 10 percent of the future earnings of one person you know. Would you pick the smartest person? The fastest runner? No, You're going to pick the person that has the right habits.” — Warren Buffett
Read a lot: If Munger and Buffett read 500 pages a day, it must be important. They're smart because they read. They're rich because they're smart. Buffett started reading investing books when he was 7.
“I just sit in my office and read all day,” says Buffett.
Buffett realizes that knowledge builds like compound interest. If a BILLIONAIRE does it, why shouldn't we? I was inspired to pick up the “Book-a-day” habit by millionaire Tai Lopez.
So do you just start reading a book a day?
Easy.
Don't start by reading a book a day. ☺
Set a goal to read 5 pages. Next week try 10. Next week, 20. And on and on. Keep a counter of total pages read or books finished to keep you motivated and use lift.do to track your daily progress.
“Go to bed smarter than you woke up.” — Charlie Munger
Save At Least 10%: In the Youtube video below, Mr. Buffett tells young men and women to save at least 10% of your income.
He says he saved $10,000 after he got out of school which would have been worth millions, he says. Even if it was invested in the S&P 500 Vanguard mutual fund with an ROI of 8% and no added investments, that $10,000 would be worth just over a million after 60 years. But since it’s Buffett, it would be worth millions.
Never Use Credit Cards: This part of the video Mr. Buffett gives advice regarding credit cards. His advice?
Forget about’em. You can't make money by borrowing at 18-20%. I'm one of those people who says, “Yeah yeah, but I pay mine off every month.” I’ve paid interest on a credit card before because I forgot to pay it off.
Credit cards are so damn tempting to use. I just spent $500.00 on a new 27" monitor and 13 books on Amazon.com. I have plenty in savings and investments, but this wasn’t part of my spending money. It was borrowed money. Warren Buffett says it best in the video, “You don’t want to be on the the side of the equation that’s always behind in life.”
I don't think having a bowl of candy in my house is smart. I want to stay fit, lean and healthy. A bowl of candy is too damn tempting. The same goes for credit cards. Now, excuse me while I go close a few credit accounts and un-link my Amazon.com account.
I think it is wise to listen to the advice of billionaires- especially when it comes to finances. I just need to humble myself and realize I don’t know anything about nothin’.
Think of People As Investments: When you find a great friend, lover or business partner you invest in them by spending time with them. These are not wasted minutes better spent on your business or projects.
When you help another human you are investing in that person. They will reciprocate and help you back. Just make sure you invest in the right people and do it like Warren Buffett:
“Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.”
Translated for people:
“Only be friends with someone that you'd be perfectly happy to be friends with for 10 years.”
Stand On The Shoulders Of Giants: All of human civilization is standing on the past accomplishments of previous generations. How much progress would we make if you had to create your own language when you were born?
Thankfully that was done for us thousands of years ago. If you want to get ahead in life, stand on the shoulders of current giants.
Mr.Buffett says it best: “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
Just like the credit card example above, environment is always more powerful than you or me.
I know my mind isn't disciplined enough to be able to shut out negative people 24/7, so I hang out with positive people and mentors who are better than me.
No Computer At His Desk/No Cell Phone: Mr. Buffett doesn’t have a cell phone or a computer at his desk. Understandably, most of us work on our computers, but how much of your time do you invest in your work?
I use an app called www.rescuetime.com to see where my time is spent while I’m on the computer. The first step to enlightenment is awareness.
Don’t think you are better or more productive without knowing for a FACT you are. It’s a cognitive bias known as the Dunning–Kruger effect.
Buffett is one of the richest men in the world and he makes due without a computer at his desk or a cell phone. Some things aren’t as essential as we think.
Understand The Law Of Compound Interest: Not just in finances. Compound interest is a law of life. Reading books, gaining knowlege, spending time with mentors, working on your business, writing a book, starting a new habit- all of these things are investments in your future.
I like to think like a consumer once a week and like an investor the rest of the week.
“Life is like a snowball. The important thing is finding wet snow and a really long hill.” — Warren Buffett
Check out this cool childrens book I found online while researching for this article about 13 habits here.
