Warren Buffett’s Key to a Happy Life: Focus on These 4 Things
Plenty of people ask Warren Buffett for advice. He’s happy to share it; every year, thousands convene at Berkshire Hathaway’s annual meeting to gather pearls of wisdom from Buffett and vice chairman Charlie Munger.
Here are three of my favorites.
Warren Buffett on Success
As Buffett says he tells college students:
When you get to be my age, you will be successful if the people who you hope to have love you, do love you.
Clearly, that’s true where family and friends are concerned; for example, research shows you’ll definitely be more successful if you marry the right person.)
Substitute “like” for “love,” and it’s also true in business. Skills, education, experience – where success is concerned, all those things and more matter.
But one thing matters more. True success – the kind of success that also results in happiness – isn’t possible unless you build great relationships. Granted, you can be self-serving, obnoxious, and insufferable and still get rich. But you’ll be rich and lonely.
Plus, it’s a lot easier to be successful if people like you; when your employees, your customers, your partners, and your colleagues not only hope you succeed but, without being asked, actively help you succeed. Those kinds of relationships don’t just make you successful in business.
They make you successful in life.
And make you a lot happier.
Warren Buffett on Choosing Your Significant Other
You want to associate with people who are the kind of person you’d like to be. You’ll move in that direction.
And the most important person by far in that respect is your spouse. I can’t overemphasize how important that is. Marry the right person. I’m serious about that.
It will make more difference in your life.
Research supports that position. This study found that people with relatively prudent and reliable partners tend to perform better at work, earn more promotions, make more money, and feel more satisfied with their jobs.
What the researchers call “partner conscientiousness” predicted future job satisfaction, income, and likelihood of promotion.
According to the researchers, “conscientious” partners perform more household tasks, exhibit more pragmatic behaviors that their spouses are likely to emulate, and promote a more satisfying home life – all of which enables their spouses to focus more on work.
As one researcher wrote, “These results demonstrate that the dispositional characteristics of the person one marries influence important aspects of one’s professional life.”
Or, in simple terms, a good partner sets a good example – and helps you become an even better you.
Keep in mind, that doesn’t mean choosing your significant other based solely on conscientiousness. As the researchers write, “Marrying a conscientious partner could at first sound like a recipe for a rigid and lackluster lifestyle.”
Nor should you end a relationship solely because you feel your partner is lacking in those areas. But it does appear that having a conscientious and prudent partner is part of the recipe for a better and more rewarding career.
So instead of expecting your partner to change, think about what you can do to be more supportive of your significant other. Maybe you can take on managing the finances, or take care of more household chores, or repairs, maintenance, or schedules.
After all, the best way to lead is by example, and in time you may find that you and your significant other make an outstanding – and mutually supportive – team, one more likely to help each other achieve their goals.
And live more satisfying and fulfilling lives.
Warren Buffett on Time Management
Here’s what Buffett thinks about how to best use your time:
The difference between successful people and really successful people is that really successful people say no to almost everything.
People are going to want your time. It’s the only thing you can’t buy. I can buy anything I want, basically, but I can’t buy time.
Think about it this way. Efficient people are organized and competent. They check things off their to-do list. They complete projects. They get things – the more things, the better – done.
Effective people do all that, but they check the right items off their to-do lists. They complete the right projects. They get the right things done.
They do what makes the biggest difference for their business, and for themselves.
If you’re struggling to accomplish what you want to achieve, take a step back. Determine what really matters. Determine what really drives results. In most cases, what really drives results is you.
So stop thinking your presence is absolutely necessary in every meeting, and on every call. That’s especially true if you’re a leader, because when you’re not there, your teams naturally feel a greater sense of freedom, autonomy, and, most important, responsibility.
Do what Buffett does: See an open calendar as an opportunity, not a liability.
Because a full calendar is a terrible proxy for success.
Warren Buffett on Hiring Great People
What model does Buffett use for managing people? A 1920s pro baseball batboy.
As Buffett wrote in his 2002 shareholder letter:
My managerial model is Eddie Bennett, who was a batboy. In 1919, at age 19, Eddie began his work with the Chicago White Sox, who that year went to the World Series. The next year, Eddie switched to the Brooklyn Dodgers, and they, too, won their league title.
Our hero, however, smelled trouble. Changing boroughs, he joined the Yankees in 1921, and they promptly won their first pennant in history. Now Eddie settled in, shrewdly seeing what was coming. In the next seven years, the Yankees won five American League titles.
What does this have to do with management? It’s simple – to be a winner, work with winners. In 1927, for example, Eddie received $700 for the one-eighth World Series share voted him by the legendary Yankee team of Ruth and Gehrig. This sum, which Eddie earned by working only four days (because New York swept the Series) was roughly equal to the full-year pay then earned by batboys.
Eddie understood that how he lugged bats was unimportant; what counted instead was hooking up with the cream of those on the playing field.
I’ve learned from Eddie. At Berkshire, I regularly hand bats to many of the heaviest hitters in American business.
Buffett doesn’t just study companies to spot opportunities. He also works to identify companies with leaders capable of seizing, and then building on, those opportunities.
Clearly he’s a great manager – but more importantly, he’s a great identifier.
Where team effectiveness is concerned, the impact ratio is roughly to 90 percent team, 10 percent leader; a great team with a mediocre leader nearly always outperforms a mediocre team with a great leader.
Put together a team of awesome salespeople and you can basically leave them alone. Put together a team of awesome engineers and you can basically leave them alone.
No matter how transformational, inspirational, or exceptional, even the best leaders can only produce incremental improvements.
As Buffett wrote:
Berkshire’s operating CEOs are masters of their crafts and run their businesses as if they were their own. My job is to stay out of their way and allocate whatever excess capital their businesses generate. It’s easy work.
That doesn’t mean you shoiuldn’t spend significant time developing the people you currently lead. You definitely should.
But you should also spend time identifying people who won’t really need to be led. Add great people to your team, and you’ll be able to spend less time managing that team and even more time identifying great people to add to the team.
Which will make it be easier to attract great people, since superstars love to work with superstars.
Do that, and as Buffett says, while your work may never be easy… it will definitely be much easier.