Warren Buffett's Life Advice Will Change Your Future (MUST WATCH)

If you get to be 65 or 70 and later and the people that you want to have love you actually do love you, you're a success. I've never seen anybody that reaches that age, I mean I'm not talking about somebody that's in extreme poverty or pain or something, but I've never seen anybody that if they have a lot of people that love them that is other than happy and I've seen some very very wealthy people that they give testimonial dinners to and name schools after and everything. Nobody loves them, you know. By far the best investment you can make is in yourself. I mean that, for example, communication skills. I tell those students that come that they're going to graduate schools and business and they're learning all these complicated formulas and all that. If they just learn to communicate better and both in writing and in person they increase their value at least 50 percent. I mean if you can't communicate, somebody says, you know, it's like winking at a girl in the dark. Nothing happens, you know, basically and you have to be able to get forth your ideas and that's relatively easy. I did it myself with the Dale Carnegie course. Some people wish I'd taken a shorter course now in terms of my talking later on, but it's just hugely important and if you invest in yourself nobody can take it away from you. The second thing, which I'll get a certain criticism for not living it, but I do tell those students, you know, that if I gave you a car and it'd be the only car you'd get the rest of your life, you'd take care of it like you can't believe any scratch. You'd fix that moment, you'd read the owner's manual, you'd keep a garage and do all these things and you get exactly one mind and one body in this world and you can't start taking care of it when you're 50. By that time you'll have rushed it out if you haven't done anything, so you should really make sure that you just remember that you've just got one mind and body to get through life with and to do the most with it. What about life advice? Well, life advice is, you know, the most important thing aside from the things I've talked about already, is really who you associate with. You want to associate with people that are better than you are. I mean, basically you'll go in the direction of the people that you associate with and you want to have the right heroes. You want people, if you want to emulate somebody, you better pick very carefully who you want to emulate and obviously you can't pick your parents. They're going to have enormous influence on you, but you don't get a choice on that, but you get choices as you go down the line and who you admire, who you want to copy, and the most important for most people in terms of that decision is their spouse. It's also important in terms of a partner in business, but the partner in life is the most important one. You want to pick a spouse that's a little bit better than you are and then he or she, and you hope they don't figure it out too fast. Is business school worth it? Depends on the person, much more than it depends on the school. I mean, I wouldn't worry. Some people are going to get a lot out of advanced education and some people are going to get very little and I don't even think it's important that every person go to college at all. I mean, we have all kinds of jobs at 70 or so thousand a year, 80,000 a year that college training is not of use and I actually was not keen on going to college myself. Yeah, my dad kind of jollied me into it. He could get me to do anything, but if they'd had an SAT test those days, he would have taken the test for me. I knew I could have a good time and I liked investing and I didn't really feel I could read the books. It's a big commitment to take four years and the cost involved and maybe the loans involved and everything. I think depending on what your interests are in life, I don't think it's for everybody. I think it's for a lot of people, but there ought to be a reason you're going and I didn't really see much reason. It never bothered me if people disagreed with what I thought as long as I felt I knew the facts. I mean, there's a whole bunch of things I don't know a thing about. I just stay away from those. So, I stay within what I call my circle of competence. Tom Watson said it best. He said, you know, he said, I'm no genius, but I'm smart in spots and I stay around those spots. Well, I try and stay around those spots and I just don't have a problem if somebody says, you know, you're wrong on something. I just go back and look at the facts and I think that really is much more important, frankly, than having a few points of IQ or having an extra course or two in school or anything of the sort. You need emotional stability. I just read and read and read. I probably read five to six hours a day. I don't read as fast now as when I was younger, but I read five daily newspapers. I read a fair number of magazines. I read 10ks. I read annual reports and I read a lot of other things too. So, I've always enjoyed reading. I love reading biographies. Famous lesson about a margin of safety that you don't drive a truck that weighs 9,900 pounds across a bridge that says limit 10,000 pounds because you can't be that sure about it. If you see something like that, you go down a little further down the road and you find one that says limit 20,000 pounds and that's the one you drive across. The nature of capitalism is that people want to come in and take your castle. It's perfectly understandable. I mean, if I'm selling television sets or something, there's going to be 10 other people that can try and sell a better television set. If I have a restaurant here in Omaha, people are going to try and copy my menu and get more parking and take my chef and so on. So, capitalism's all about somebody coming and trying to take the castle. Now, what you need is you need a castle that has some durable competitive advantage, some castle that has a moat around it. And that moat, that's one of the best moats in many respects is to be a low-cost producer. But sometimes, the moat is just having more talent. I mean, if you're the heavyweight champion of the world and you keep knocking out people, you've got a competitive advantage as long as you can keep doing it. And it's very profitable if you're the one that happens to be able to do it. If you can turn out great motion pictures, I mean, you know, Steven Spielberg, I mean, he's a fellow to bet on and it has enormous economic value. What kills great businesses, if you look at, I do believe in looking at history. And I try to, I like to study failure, actually. And my partner says, all I want to know is where I'll die so I'll never go there. And we want to see what has caused businesses to go bad. And the biggest thing that kills them is complacency. I mean, you want a restlessness, a feeling that, you know, that somebody's always after you, but you're going to stay ahead of them. You always want to be on the move. And when you've got a great business, you know, like Coca-Cola, which is, there aren't any like Coca-Cola, but you really, the danger would always be that you rest on your laurels. But I see none of that, obviously, at Coca-Cola, but that isn't the key. To compete the same way when you've got 1.8 billion servings being sold daily as when you were selling, you know, 10 a day. And that restlessness, that belief that tomorrow is more exciting than today, you just have to have it permeate the organization. Who was Ben Graham? He was your primary mentor, model? He was a Columbia. I read his book when I was 19 at the University of Nebraska. And I'd started investing when I was 11, and I started reading about it when I was like seven. So I'd gone through all, I read every book in the Omaha Public Library that was on by the time I was 12 on investing and stock market. And I had a lot of fun, but I never really found out, I never got grounded in anything. And it was, it was entertaining, but it wasn't going to be profitable. And then I read Graham's book, The Intelligent Investor when I was at University of Nebraska. And that just opened the whole thing up to me. Yeah. And I, and I named my, my oldest son is named Howard after my dad, Graham Buffett. And he was a marvelous man, never expected anything from me in return. You have given a lot of fabulous advice, but what's the best advice that you've ever received? Well, I, I received it in a variety of forms, particularly from my father when I was very young, but I mean, he basically, I think, taught me how to live. Not that I did it perfectly or anything like that, but I mean, he was giving me lessons, but he wasn't doing it by preaching to me. He was doing it by example, but basically, well, the biggest lesson in a sense I got is the power of unconditional love. I mean, I think there is no power on earth, like unconditional love. I think that if you offer that to your child, I mean, you're 90% of the way home and maybe days when you don't feel like it, it's not uncritical love. That's a different animal, but, but to know you always can come back. I mean, that is huge in life. That takes you a long, long way. And I would say that every parent out there that can extend that to their child at a very young age, it's going to make for a better human being. And you felt like you got that kind of unconditional love from your dad? I absolutely did. Yeah. That's a powerful thing. It is a powerful thing.