Warren Buffett:  “You Do Not Have to Cheat to Make Money”

investment, personal development, Success, Warren Buffett

At Coca Cola’s annual shareholders’ meeting last month, Warren Buffett, whose investment firm Berkshire Hathaway holds more of the companies stock than any other single holder, surprised the 700 attendees by playing his ukulele.  Coca Cola and it’s largest investor seized upon the moment by recording a little publicity piece that features Buffett playing and singing the vintage 1970s jingle about “…buying the world a coke” something Buffett admits at the end of this ditty he could do, but didn’t feel it would be prudent for the sake of his shareholders.(1)  Buffett who is irrefutably the greatest investor of the 20th century and beyond, could be criticized here for shamelessly hocking unhealthy sugar water by the ultra health conscious; he could certainly be slammed for his insatiable appetite to drive up his profit by the minimalist; and anyone from the socialist to the hard core conservative could find reason to criticize him. However, his down to earth style in this video strangely captures the essence of the man.

For the record, Buffett does enjoy picking up the ukulele and he doesn’t just hock coke for profit he actually enjoys consuming it on a daily basis. So no, he’s not the model of physical fitness nor does he care to be.  And yes, he is driven by profit, yet strangely he spends virtually none of it on himself.  Through and through he is who he appears to be.  So if greed, vanity and luxury don’t drive him, why does he relentlessly pursue wealth?  Now I am no Buffett expert, but my theory is that this unique man finds passion in the pursuit of business excellence and money or market valuation just happens to be the scoreboard.  Because Buffett has been emphatic about sticking to his core guiding principles he has developed a trusted reputation that has saved numerous companies over the years.  In 2008, just two years after signing over 37 billion to 5 different charities he was listed as the world’s wealthiest man.  Ironically, the world knows his name but he doesn’t seem to care as evidenced by the absence of his name on his recent giving and the fact that even his company, Berkshire Hathaway, lacks his name.  And though he totally recreated that company from a textile company into an extremely successful investment firm, a quick company search reveals another as its founder. It seems his passion is enough and his formula for success, though unorthodox, obviously bears fruit worthy of sampling. (2)

Robert Kiyosaki noted that wealth creation requires three things: long term vision, delayed gratification and leveraging the power of compounding.  Buffett understood this before Kiyosaki declared it and not only did he live by them, but his solid conservative mid-western upbringing taught him that hard work, frugality, honesty, determination and character must be the bedrock upon which these wealth creation principles rest.

Born in Omaha, Nebraska during the great depression, Warren learned valuable lessons on frugality when his stock broker father lost his job.  He also managed to maintain a clear vision that one day he would be wealthy.  Paper routes provided seed money and a reputation for reliability.  He soon acquired the best routes and saved his earnings.  Exercising delayed gratification he put away a staggering $ 5,000 (60 K+ in 2015 dollars after adjusting for inflation).  Upon graduation from high school Buffett was ready to start his own investment business but his father, who he greatly respected, persuaded him to go to college where he breezed through his courses.  At 19 he found himself in an interview for Harvard Business School, but Buffett laughs in retrospect at the failed interview, chalking it up to immaturity.  This “loss” however sent him to Columbia University where he met his business mentor, a professor Ben Graham, who helped inspire his philosophy on business investing.  Graham instilled in him an understanding that the market is not there to inform you but rather to serve you.  Put another way, the market is often wrong so don’t get caught in the “trends.”

Armed with ideas and an insatiable drive, Warren instantly became a maverick by turning his back on Wall Street and heading home to Omaha, Nebraska where he would start his company, raise his family and continue to live in the same house to this very day.  Though brilliant, Buffett ran into his first obstacle as a business investor: himself. Referring to this early obstacle he recollected, “My sales pitch wasn’t very effective. I was 20 years old, I looked like I was 16 and probably behaved like I was 12… I would go through all these facts and figures and then… they’d say, ‘What does your dad think?’ At that point I’d want to punch them…” Instead of bemoaning his lack of people skills, he turned to self-help books and took a course from the Dale Carnegie institute to learn public speaking and the art of communication.  Like any good student, he immediately applied what he was learning and proposed to his wife. He laughs in an interview stating, “Right there I got my money’s worth.” (2)

The rest really is history, Buffet survived through all kinds of adversity and always came through the battle whether in court, sanctions or market crisis with his character and reputation in tact.  By 30 he was a millionaire, in his 40s he was a billionaire and his company always well outperformed the market. In 1985, stock in his company was trading at $ 2,000 per share.  In 1993 the same share was worth $ 17,000 and by 2007 it hit a staggering $ 150,000 per share.  During the economic disaster of the sub-prime crash in 2008 his show of confidence in struggling financial companies saved them from ruin and though he too suffered losses in the down economy today, his shares are trading at $ 200,000 per share.

Buffett is a true rugged American Individualist; he marches to the beat of his own drum.  He’s relentless in his pursuit of a bargain.  He’s shrewd, yet honest. He’s absent minded yet laser focused. He’s driven to excellence in his areas of passion and unimpressed by any show of pomp or extravagance that doesn’t line up with his purpose. His life illustrates what can be done when one maintains a long term vision, delays gratification over and over again and allows the power of compounding to work in their behalf.  And how did he learn all this?–through self-study, mentors and the school of hard knocks.  But when those knocks came it is clear he learned, adjusted and met them head on.  Finally, the man, who though strict adherence to excellence has earned more money than just about anyone on the planet, wasn’t really that interested in spending it on himself and so he gave more money away then any other individual in the history of the world because it turns out that pursuing money wasn’t really the motive. No, it was about a passionate pursuit of being excellent at what he loved to do.

While addressing a group of college students recently, Buffet advised them that success would come if they would get out of debt, stay out of debt and then never stop investing in themselves.  Your passion to create positive change in your life or in the world may not be in business investing, but if your capital (time and money) is wasted on that which you haven’t earned, then the time required to repay the interest will hold you hostage to your creditors and your dreams and influence will escape you.  But if through some exercise of vision and delayed gratification you pursue your passion and even acquire some seed money you may just find yourself in a position to give more away than you ever thought possible, but remember your joy will be found, as they say, in the journey.  A journey defined by living free and becoming who you were meant to be.

References:

  1. http://www.coca-colacompany.com/stories/from-one-icon-to-another-warren-buffett-serenades-the-coca-cola-bottle
  2. Warren Buffet Biography Documentary – Produced by Luminant Media for Bloomberg TV 2012
  3. http://en.wikipedia.org/wiki/Warren_Buffett accessed accessed 5/11/2015

Remember to KISS Daily!

achievement, Blog Entries, character

Mark Twain once said, “I didn’t have time to write a short letter, so I wrote a long one instead.” Frank Betcher declares that the # 1 reason salespeople lose business is over talking; Ron, a personal acquaintance of mine and a successful national sales trainer emphatically teaches the skill set of summarizing a prospect/client’s comments in ten words or less; and the famous Abraham Lincoln moved the world with his brief to-the-point speeches and arguments.

As a young lawyer Lincoln found himself representing the Rock Island Railroad company in a lawsuit brought by the wealthy steamboat owners who feared a proposed railway bridge across the Mississippi.  Not wanting to see their transport business diminished, they sued to protect their turf and stop the project.  The owners hired the best lawyer money could by —Mr. Judge Wead.  In his closing arguments, he captivated the crowd and the court with two hours of powerful oratory before sitting down to thunderous applause.   As the applause died down, the thin country lawyer took the floor.  The audience braced themselves for an equally long rebuttal, but instead Lincoln, simply congratulated his opponent for a fine speech, and said, “…but gentleman of the jury, Judge Wead has obscured the main issue.  After all, the demands of those who travel from east to west are no less important than those who navigate up and down the river.  The only question for you to decide is whether man has more right to travel up and down the river, than he has to cross the river.”  Following this short statement, he took his seat and the jury quickly returned a verdict in his favor.

The Bible says, “But let your communication be, yea, yea; Nay, nay: for whatsoever is more than these cometh of evil. (Mathew 5:37)”  While this may have just as much to do with warning against a flattering and deceitful tongue, it also supports the idea of keeping things simple and straight forward.

Finally, take a look at the US Constitution, the first of its kind.  To this day, it remains the shortest of all written National Constitutions and yet its straightforward restrictions and protections produced the freest and most prosperous nation the world has ever known (though years of laws, case law, court interpretations and gradual power creep have changed its simplicity today).  Now imagine what brevity, simplicity and sincerity can do for your personal life, goals, businesses, communication, families and influence in community and even country.  Surely you’ve heard of the KISS principle (keep it simple stupid).  I propose instead we think of it as “Keep Inching to Success Simple.”  Or in other words your freedom and success doesn’t come because of some elaborate scheme, it comes from properly exercising your will by doing small simple daily actions.

“Simple?”

“Yes!”

“Easy?”

“No”, but the results WILL astound you.  So remember to KISS daily!

Thomas Jefferson, Titan of Liberty

achievement, Blog Entries, Education, freedom, perseverance, Personal Application, personal development, Podcast, Thomas Jefferson

Podcast # 13: Thomas Jefferson, Titan of Liberty

The list of incredible accomplishments assigned to Thomas Jefferson seems super human.  How did he accomplish it and what was he most proud of?

You’ll discover the foundation of this answer here and in the process you just may find yourself accomplishing a whole lot more.

Listen in and tell me what you think

A Century of Education and the Slight Edge = Freedom!

Podcast

What do MICROWAVES, MOVIES AND MODELS all have in common?  They’ve all contributed to changing our perception of the success cycle.  The farmer understands that you have to plant, CULTIVATE and then harvest, but today’s fast paced society leads us to believe we can plant, skip cultivate and go right to the harvest.  It took over 100 years of education in America to create the right environment to reap the rewards of freedom.  The good news is it won’t take you that long, but you will need to apply the principles of the Slight Edge (great book by Jeff Olsen) to live the life of success and happiness you desire.  LISTEN IN TO LEARN MORE…