9 Daily Habits of Warren Buffett by Isaac Fox | Book Summary
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Pages : 43
Genre : Self-Help Books
Introduction
Remember the saying: “We are what we repeatedly do. Excellence, then, is not an act, but a habit” [By Aristotle]
Only two things matter to get any desired result. Willingness to do and act, and you’d be surprised to know that the majority fail in executing the second.
Instead of experimenting with the habit patterns that might eventually succeed, the author Isaac Fox, an investment banker, analyzed the habits of the most successful persons on Earth.
Among them, Warren Buffett, through his classic habits, has crossed a billion-dollar mark and managed to forge his place among the big giants on the planet.
Let us look at the qualities and habits that make him who he is one by one.
Habit 1: Reading + Numbers
People who read become instantly wiser not because they know what to do, but more because they know – what not to do!
Reading establishes and strengthens both the hemispheres of the brain and re-wires broken connections. As the brain can co-ordinate better, it manages decision making effortlessly.
He read books about the numbers game: – “One thousand ways to make $1,000?”, “Intelligent Investor” written by what he considers his “Mentor”, Benjamin Graham.
Seven-day plan for brain acceleration via systematic reading
Pick a piece of the most engaging read – Ideally something that would feel “immersed in it.” Finance or Fiction does not matter.
Rule 1: Put your smartphones way.
Rule 2: No internet & television.
Rule 3: Reading rhythm! Read about ten pages in a go-to “connect” with the ideas of the author. It establishes the rhythm allowing you to immerse in the story.
Rule 4: After you have reached your pause break for a minute. Recall what you have read and what you remember.
Just read 30 minutes a day for seven days straight at the same time as the previous day whenever you are free. That’s it.
Habit 2: The Principal of Compounding in Finance and Life
"Compounding is the process of re-investing your earnings in your principal to earn an exponential return as the next growth is on a bigger principal, then following this process of adding the earnings to the principal."
“Read 500 pages like this every day,” said Buffett, holding up a bunch of reports and trade publications.
“That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
Personal use of compounding would be to be particularly regular in doing small good habitual things. Understand that compounding is nothing but using the benefit of using the previously done thing to amplify it further and produce a greater benefit.
Habit 3: The Circle of Competence
It’s all about understanding your core strengths, areas where even if you fall, you won’t regret that just because you know that you would eventually succeed.
The lesson from this habit is to take a break and find your circle of competence! And then act! Everything falls in place, and you would find yourself on the right path.
Habit 4: The Power of Isolation, Thinking and No Internet
The idea is simple – stay away from the noise and find your own voice!
It will compel you to think about what you have done this year and how many targets you completed that were planned. Isolation and the internet-less world introduce ourselves to the “Real ME” and ask what you have done and what you will do next. It acts as a cleaning agent and will show you the mirror.
Habit 5: Inner Scorecard or Outer Scorecard?
Having an inner scorecard means to be satisfied with your own opinion and not of everyone else.
“It is the mark of an educated mind to be able to entertain a thought without accepting it.”
This habit's essence is to follow what you love, irrespective of what others say, and then stand your ground. The world will keep on saying a few things, and then the same people would criticize you for not being original. Just do what you love and experiment. Have an inner scorecard.
Habit 6: Do what you love – The Science of not getting bored and eventually succeed!
Warren has advised many times that it is a temporary pain to work at a low salary, but then it compounds at the rate your skills grow, and the pays grow exponentially because you love doing it.
Warren further says, doing a job that you don’t like is like saving up sex for your old age.
Habit 7: Cash is King – Really?
“Cash is to a business as oxygen is to a body: "Never thought about it when it is present, the only thing in mind when it is absent.”
The best way to ensure that you don’t end up losing money is to invest in government bonds, mutual funds, and stocks.
Habit 8: Invest in yourself - Pay yourself first!
The investment that supersedes all others is the investment in YOU. The benefits are life-long, these are not taxed and inflation-free, so they always increase in value.
"Focus on what you want, invest in yourself via a course, and work towards monetizing it."
Habit 9: Time management: - 24 hours/1440 minutes a day
Step1: He suggested making a list of 25 goals that are most important as on that date.
Step2:Now highlight the top 5 of the priorities or goals in the list.
Step3: Just scrap the rest of the goals – they are not really important.
Conclusion
The above simple but effective habit patterns throw a bright light on how to be organized and productive. Perhaps, this book's essential aspect is not knowing all the assured-success habit patterns, but their EXECUTION!
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