2008-09-07

Warren Buffet’s “10 Ways to Get Rich”?

The front cover of Parade magazine features a photo of a smiling Warren Buffet next to the headline, "10 Ways to Get Rich: Warren's Buffett's Secrets That Can Work For You!"

For me? Really?

Okay, tabloid-style headline aside, if you've been reading me long enough, you know I'm a big fan of Warren Buffett. So I promptly stole away the Parade magazine before my wife got to the paper or before my kids could strew it all over the house (a process which takes them approximately 3.6 seconds)—and retreated to somewhere I had half a chance of getting through the article. The article is based on a new book that is coming out later this month, The Snowball: Warren Buffett and the Business of Life. It's an "authorized biography," and the author, Alice Schroeder apparently spent hundreds of hours interviewing Buffett for the book. Hundreds of hours? Pretty sweet.

So here were the 10 "secrets":

  1. Reinvest your profits
  2. Be willing to be different
  3. Never suck your thumb
  4. Spell out the deal before you start
  5. Watch small expenses
  6. Limit what you borrow
  7. Be persistent
  8. Know when to quit
  9. Assess the risks
  10. Know what success really means

I wouldn't call any of these secrets, and I'd be willing to bet that most of these nuggets of wisdom appear in past books, articles, writings, and quotes about or by Buffett (and in his annual letters to shareholders). And I think most of these are pretty self-explanatory, except perhaps, "Never suck your thumb." The article describes that one as being decisive and acting quickly. Get the information you need to make a decision—but then move forward and making that decision on an appropriate timeline or with an appropriate deadline. The article explains that Buffett "calls any unnecessary sitting and thinking 'thumb-sucking.'"

But what was both interesting and powerful in the article for me was the many personal stories woven into the "secrets," illustrating how Buffett learned that particular lesson or how he implements it for himself. For instance, in the article's description of the first point, "Reinvest your profits":

In high school, [Buffett] and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stock and to start another business. By age 26, he'd amassed $174,000—or $1.4 million in today's money.

Nice!

These are what make the article definitely worth checking out: 10 Ways to Get Rich: Warren's Buffett's Secrets That Can Work For You!

Related Posts:

What Buffett's Been Doing Lately—And Does Kiplinger's Have a Man Crush?

Where I Outperform Warren Buffett (And What I Think It Means)

So A Slow-Moving Ape Can Beat The Market?

Diminishing Returns In The Stock Market According to Warren Buffett

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