I’m not even going to pretend that I understand the logistical details of how Warren Buffett invests money and how—at a net worth of more than $100 billion—he is the sixth richest person in the world today.
I am more of a better-safe-than-sorry investor. So no, I wouldn’t know the first thing about his investing strategies.
So, what on earth have I learned from him, you wonder? If this post is not about the five best strategies to invest your hard-earned money, then what am I babbling about here?
Again, good question.
And I have an answer for you. I promise.
What I’m babbling about are the life lessons I’ve learned from Buffett. The way he has led his life is truly an inspiration. He is one of those people who put his money where his mouth is, one of those people who genuinely walks the walk instead of just talking the talk.
And this leads me to five lessons I’ve learned from Buffett that have impacted my life:
1. Never forget where you came from.
There is an extremely popular and often-quoted story about Buffett. And the story is that Buffett, to this date, lives in the same house that he bought for $31,500 in 1958 in Omaha, Nebraska.
Interestingly, Buffett calls this investment in his first and only house his best investment ever. And I don’t think he means it the way we think. It’s the house that gave him his big start in life, and he often says that his first house provides him with everything he needs to live. So why would he shift to live somewhere else? Also, between you and me, I think that even financially it’s probably the best return on investment he’s ever gotten!
He once said, “I’m not interested in cars and my goal is not to make people envious. Don’t confuse the cost of living with the standard of living.”
2. Make sure children learn the value of money.
You see, there are rich people and then there are rich people. There are rich, trust fund offspring like the Paris Hiltons and Megan Ellisons and Walton kids, and then there is Buffett. I’m sure there were other similar businessmen like Buffett in the past who decided not to leave trust funds to their children. But my first exposure to a mega-rich billionaire who decided against leaving his riches to his offspring was by way of Warren Buffett.
A Fortune profile of Buffett states, “But he believes that setting up his heirs with ”a lifetime supply of food stamps just because they came out of the ‘right womb” can be ‘harmful’ for them and is ‘an antisocial act.’ To him, the perfect amount to leave children is ‘enough money so that they would feel they could do anything, but not so much that they could do nothing.’ For a college graduate, Buffett reckons ‘a few hundred thousand dollars’ sounds about right.”
I first learned about this (if I remember correctly) when Oprah Winfrey, on her then-eponymous talk show, spoke to a bunch of trust fund kids, including the Hilton girls and the Buffett grandkids. So while Nicky Hilton whined about how because of her billionaire status it was always assumed that when she went out with friends she would be expected to pick up the check (Quelle horreur! Picking up the tab, which is maybe a couple hundred dollars, when you have millions of unearned dollars in your bank account.), the Buffett grandkids talked about how their grandfather paid for their education and gave them money during Christmas. And that was pretty much it. They were expected to go out and do the hard work of earning money and making their way in life like everyone else.
At the time, I’m not sure if there was necessarily a lesson I learned here as much as how in awe I was. Over the years, I’ve realized that the lesson I learned was to never stop challenging myself. Even if it appears as if things are okay financially, we should never stop doing the hard work. Which leads to the next lesson…
3. When you have more than enough, give it away.
Bill Gates, Melinda Gates, and Buffett were the pioneers in creating The Giving Pledge which is “a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.”
Buffett has said in multiple interviews that he will give away over 85 percent of his wealth to charitable organizations, and that his offspring will get a portion of the remaining 15 percent. It takes a lot of guts to do something like that. Most of us will do anything for our family. But businessmen like Buffett, who are so against dynastic wealth, make me think about what to do with the little that I have. And I realized that I, too, will give all of my wealth away one day.
4. Love what you do.
Not all of us are lucky enough to be able to earn money doing what we love. I love writing—but it doesn’t pay any of my bills. Nonetheless, I believe this is an important lesson to learn.
And so I’ve used this lesson in my own way. A few years back, I launched my own personal blog—The Messy Optimist—and it is a labor of love for me. If ever I reach a stage where it pays some of my bills, I will literally jump with joy and call it the biggest win of my life. Two years later, I think that ship has sailed. But I do have a regular day job. And the fact that my paycheck from said day job allows me to write on the side has actually made me love my day job. Maybe it’s gratitude. Where my day job used to weigh heavily on my heart because it wasn’t really what I wanted to do, now I love and am grateful to have it.
5. Find happiness in the small things.
Look, I’ve never had the kind of money where I could claim I enjoyed the “big” things in life. Once, and only once, did I get upgraded to first class when I traveled from Frankfurt to Mumbai. I’ve never seen the inside of a Porsche or a Lamborghini; I don’t think I’ve even been close to either of these car. I’ve never owned any designer clothes or shoes or bags.
And I’ve never missed them. Can’t miss what you’ve never had, eh?
But in my own sphere, I’ve had some fun. My biggest weakness is travel. And at 45-plus countries and counting, I’m definitely among a minuscule group of people who’ve been privy to such an indulgence. I own multiple properties, all the size of a matchbox, but they’re mine. So yes, I’m lucky enough to have more than most—and I never, ever take that for granted,
But Buffett taught me an even more valuable life lesson. At a $100 billion-plus net worth and counting, Buffett still gets breakfast at the local McDonald’s. Every day. Yep, he lives below his means (as any smart finance person would). No muss, no fuss. Yes, he’s frugal but I bet he also does it because he genuinely enjoys the small pleasures in life. What others may take for granted, he does because it brings him joy.
These are some of the key life lessons I’ve learned from Warren Buffett. Did any of these resonate with you? Also, is there anything you learned from him that you would like to share with me here?