Do You Want to Be Successful? Get 10 Awesome Clues from Warren Buffet’s 10 Rules for Success

I was on Youtube recently and stumbled onto this video by Evan Carmichael on Warren Buffet’s Top 10 Rules of Success. I found it quite interesting and motivational so decided to share it in today’s article. Here are Buffet’s top 10 rules of success:

1. Love the game

Did you know that Warren Buffet started by selling door to door? He sold many things door to door at a very early age, including selling gum, magazines, and delivering papers. As a little boy, his allowance was a nickel a week and he loved the idea of reporting on this. More importantly, Warren enjoyed the hustle of running a business and being his own boss. He loved the game and that was one of his biggest motivations for staying the course.

Do you love what you do? Do you have a passion for your business?

It is critical that you do what you love, particularly if you want to get into business. One of the things I tell people going into business for the first time is to start with a passion business. This is a business where you’re doing what you absolutely love to do. One way to discover your passion is to consider if it is something you can actually do for “free” or something you’ve done for free many times for family members and friends.

2. Understand accounting

I like this one, not because I’m an accountant but because it just makes sense to understand the basics of accounting if you’re in business.

According to Warren, if you’re going into business, you have to understand accounting. It is the language of business. If you don’t understand accounting, then you should not be in business. It’s like being in a foreign country with a different language than the one you speak. If you don’t understand the language, you will hardly be effective.

After graduating at the age of 19, Buffet enrolled at Columbia Business School, where he learned business and accounting and eventually created his investment philosophy around a concept pioneered by Benjamin Graham — value investing.

3. Delight customers

To be successful in business, you need a genuine desire to delight your customers on a daily basis. Customer experience is always key. It will determine whether your business will be successful or not. Customers may forget the price tag of your product or service but they will never forget the great experience they had in their interaction with your business, product, or service.

So, as part of your business plan, always include a deliberate plan to integrate customer experience in all that you do. Get in the habit of learning more and more about your customers — their dreams and desires, their fears and pains — and work on developing products and services that speak to the desires and fears of your customers. When you do this, you’re guaranteed to succeed in business.

4. Conquer your fears

Buffet starts with this quote by Samuel Johnson:

“The chains of habit are too light to be felt until they are too heavy to be broken.”

He discusses his fear of public speaking and concluded that taking action to address his fear of public speaking was probably one reason he achieved the success he had in life. If he had not confronted the poor habit of the fear of public speaking very early in his career, it would have been harder to change later.

He proudly displays his certificate of completion of the public speaking course in his office rather than displaying the certificates of his degrees from the University of Nebraska and Columbia University. That is how important conquering his fear of public speaking is to him.

You must not let poor habits hold you back from pushing towards your goals. Learn to face your fears and learn to conquer them to achieve a breakthrough in your life and in your career.

5. Do things your way

Buffet talks about the freedom that comes from running your own business. One of which is doing things your own way. He jokes that he’s 72 at the time of the speech and he should be retired in Florida enjoying life like other retirees his age, after all, he’s now receiving social security.

He says the reason he’s not retired is that he loves running Berkshire Hathaway. He likens it to painting your own painting without having others second guess you. He enjoys the creativity of running his business and doing things his own way.

6. Stick to your area of expertise

Buffet acknowledges that he does not know a lot of things and he’s ok with that. Here, he underscores the importance of focusing on your area of competence and avoiding everything else. He credits his investing success to only investing in companies he understands.

When asked if he had ever invested in a technology company, his response was “No”. Why? Because he does not understand technology companies. He agrees that a technology company may be great but he stays away since he does not understand it. He makes the point that he does not have to profit from every opportunity.

7. Read.. a lot!

Buffet loves to read. As a kid, he read a lot more than most kids his age and he fell in love with it. It’s a habit he never dropped growing up. He recalled how much he loved the “The World Almanac”, one of the first books he read.

His intrigue in business started at age 7 when he read a book titled “A thousand ways to make a thousand dollars”. He was fascinated with one of the ways in the book — owning penny weighing machines. He was so fascinated with the idea that he calculated how much it will cost to buy the first penny weighing machine and how long it will take to make enough profit to buy a second one, a third one, and so on until everyone in the world owned a penny weighing machine. He created complex compound interest tables for this to help with his calculation.

He recalled reading his first investment book in his dad’s office and eventually reading all the books in the office, some of which he read more than once. And this is how he got started in the investing business. He bought a Moody’s manual on investing from Amazon and used this to find undervalued stocks.

He never stopped reading, he never stopped learning. So, you should do the same if you want to be successful.

8. Maintain a good reputation

In his letter to his leadership team, he writes, “We can afford to lose money, even a lot of money. We cannot afford to lose reputation, even a shred of reputation. Let’s be sure that everything we do in business can be reported on the front page of a national newspaper…”

He credits his company’s success to the reputation that the company has built over the years. It took his company 37 years to be ranked in the top 3 of the most admired companies in the world but he’s humble to admit that it will only take 37 minutes or less to lose that reputation. If you lose it, you can’t get it back.

Reputation is so key in life and in business. Without a reputation, you have nothing. So, work as hard as you can to protect your reputation in the market place.

9. Be the person you want to be

Look at the people you admire in life and list the qualities in them that attract you to them. Generally, these people will have an upbeat attitude on life.

They are generous.

They are humorous.

They do more than their share.

They are thinking about nice things to do for you.

According to Buffet, a lot of these qualities are not innate, they can be acquired. If you can choose the kind of person you want to be, why not choose those qualities you admire and be that person. He goes on to stress that it is best to develop these habits very early in life as it is harder to develop them at an older age.

If you have great qualities, people would love to work with you. And you will get the best out of people if they feel good about you.

10. Learn from mistakes

Buffet acknowledges that he has made a lot of big dumb mistakes. In fact, he says buying Berkshire Hathaway was a mistake. It was a lousy textile business that he bought cheaply. According to Buffet, for many years, he was focused on buying companies cheaply and this was a mistake.

He says it is much easier to buy wonderful businesses at a fair price as these businesses will compound and make you a lot more money over time. He sums it up like this:

Time is the friend of the wonderful business and time is the enemy of the lousy business

In life and in business, it is unavoidable to make mistakes. However, you don’t want to miss the lessons from those mistakes. So, cherish your mistakes as this is your platform for success.

Final Thoughts

Great lessons from one of the most admired men in life and in business. I’ve learned quite a lot from the wisdom shared by Buffet in these top 10 rules of success and I hope you have as well.

P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.