‘Happiness’ is ‘Freedom’ to do what we love every day. Am already celebrating 1 year anniversary since I quit job to pursue my passions!
We have all learnt a lot about investing, business and finance from Warren Buffett
But I think there are many life lessons I gleaned away from Mr. Buffett on how to lead a great life. Here are 5 such powerful Life lessons that turned my life for ever:
Lesson 1: Inner Score Card
This is the most powerful lesson I learnt from Warren and I implemented but with great difficulty. The idea is simple – To have a set of inner principles or scorecard that drives you everyday even when no one is watching. This means paying no heed to what society or external world think about you or your work or the way you live. Paying no heed to how others rate you or appreciate you or critique you.
Why is it difficult for humans to practice this everyday?: Because humans are social animals and needs social validation in every deed of his or hers. This is one reason social media thrives where everyone gets a chance to share what they buy or where they travel or how people live and so on. People feel great in accumulating subscribers, likes, followers for the same herd mentality that gives the dopamine effect.
Buffett himself has given a great example to drive this point: He says, “Would you be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you be the world’s worst lover but have everyone think you’re the world’s greatest lover?”
One Outcome from this lesson for me: I learnt to keep calendar empty to ‘Keep Focus’ on what really matters.
Lesson 2: Saying “No” to almost Everything – Build Focus
Another extremely easy but painful habit to inculcate in a world where people constantly look at their mobile or spend time streaming series constantly or saying ‘yes’ to so many activities thereby multitasking.
But how to improve your focus? By learning to say ‘No’ to almost anything. This helps in investing as well where you let go ideas after ideas and only choose ones where the odds are heavily stacked in your favor.
Warren Buffet’s 5/25 rule based on three simple steps to do this:
- Write down a list of your top 25 goals
- Circle the five most important ones that truly matter to you
- And the real kicker is – Eliminate completely other 20 from your list
Lesson 3: Best Investment = Invest in ‘Yourself’
-Invest in Anything that improves your own talents
“The best thing you can do is to be exceptionally good at something, Whatever abilities you have can’t be taken away from you” said Buffett
One Outcome from this lesson for me: I no longer worry if I have to spend for courses or programs relating to my field of knowledge.
Lesson 4: ‘Knowledge’ Builds and Compounds like capital
Keep Reading, learning and mastering in your “Field of Work”
Buffett spends 80% of his working day ‘reading’ and ‘thinking’ — Critical for success in his business Of Capital Allocation (Investing)
One Outcome from this lesson for me: To dedicate my day reading books, annual reports, magazines and listening to business/investing/company videos in youtube everyday.
Lesson 5: Secret to Happiness = ‘Low Expectations’
I still dont think I have mastered this habit of lowering my expectations. Another extremely difficult habit to practice since humans are by nature have greed and fear. This for sure but reduces stress in life to a great extent like not running behind corporate titles, playing status game in society (closely related to inner score card concept)
Buffett famously said “The secret to a long marriage is lowering your expectations”
Charlie Munger also alludes to this principle, the 99 year old said “The first rule of a happy life is low expectations.”
Well there you have it now —How to Lead a Great Life!! Hope this helps you too.
