One of the most successful, if not THE most successful investors in America, is Warren Buffett. Using only his own money which he started making and collecting at age 6, Buffett became the world’s wealthiest man in 2008. How he started doing business, and how he evolved from an awkward geeky kid to the business magnate today, is worth every aspiring investor/entrepreneur/businessman’s attention. It may be one of the thickest books I’ve ever read, but Alice Schroeder’s “The Snowball: Warren Buffett and the Business of Life” is a must read. Below, I describe some lessons that I have personally learnt from the earlier sections of this book (i.e., his childhood):
1. There are MANY ways of making money. That sounds like a given, but how many of us really make use of this widely known fact? Knowing that there are countless ways of making money, does not necessary lead to us using all the ways we can to make money. Buffett did. Inspired by a book titled “One Thousand Ways to Make $1000”, Buffett went about making his first $1000 (and many subsequent ones) in numerous ways. He sold chewing gum; loaned pinball machines to barbers; washed cars; delivered newspapers; sold second-hand golfballs; stooped race tickets; shorted stocks…. he grabbed every single opportunity to do business. Talk about serial entrepreneurship.
2. One can never be too young to start. Buffett understood the concept of compounding. It struck him as critically important. He saw the value in TIME — the earlier he started compounding, the more years he had to compound, and the more he would end up with many years later. No wonder he started doing business at age 6 and paid his first tax at age 14, when everyone else his age was still trudging through school and teenage. The next time someone says to you “you’re too young, finish school before you think about that”, ignore them. They don’t know the value of time.
3. Inner Scorecards vs Outer Scorecards. There’s wasn’t a clear distinction of which is better, but I resonated strongly with what he described. He says, “… how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard… If the world couldn’t see your results, would you rather be thought of as the world’s greatest investor but in reality have the world’s worst record? Or be thought of as the world’s worst investor when you were actually the best?… Would you rather be the world’s greatest lover, but have everyone think you’re the worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?… It helps if you can be satisfied with an Inner Scorecard”