Part 1 - Life Advice/Wisdom
Personally I’m supposed to hate Warren Buffett for various reasons given his track record, but I can’t - the guy is never afraid to be unpopular and say what he feels.
On top of that, I mean he’s been investing for the past 80 years - so he does know a thing or two about market behavior and human nature.
Snowball: Warren Buffett and The Business Of Life is an epic 800 page long look at the self-made American multi-billionaire investor that took 5 years to write.
I’ve split up my insights of the book into 4 parts:
Part 1 - Wisdom/Advice
Part 2 - Personality Traits
Part 3 - Financial/Investing Insights
Part 4 - Cast Of Characters
All the quotes are by Warren Buffett unless otherwise mentioned.
Inner vs Outer Scorecard
(Not Giving or Giving A Damn What People Think About You)
- “The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.
- “Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover? Now, that’s an interesting question.”
- “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?”
- Warren believes his Inner Scorecard - a toughness about financial decisions that had infused him for as long as anyone could remember - kept him from wavering.
- When people call him a has-been which has happened many many times: “You can’t do well in investing unless you think independently. And the truth is, you are neither right nor wrong because people agree with you. You’re right because your facts and reasoning are right. In the end, that’s what counts.”
The Scorecard of His Parents
- Warren’s dad was a 100% Inner Scorecard guy. He wasn’t a maverick for maverick sake, he just didn’t care what other people thought.
- Warren’s Mom had an Outer Scorecard - she was always worrying about what the neighbors would think, nagging her daughters to create the right appearance.
Raising Kids
- “In teaching your kids, I think the lesson they’re learning at a very, very early age is what their parents put the emphasis on. If all the emphasis is on what the world is going to think about you, forgetting about how you really behave, you’ll wind up with an Outer Scorecard.”
Circle Of Competence
- Buffett believes in the Circle of Competence - draw a line around himself, and stay within the 3 subjects on which he would be recognized as absolutely expert - money, business, and his own life.
Women
- “Always surround yourself with women. They’re more loyal and they work harder.” - Warren’s father in law
Intensity
- “Intensity is the price of excellence”
Wall Street
- Buffett quote: “Wall Street is the only place people ride to in a Rolls-Royce to get advice from people who take the subway.”
Treating Your Mind And Body RIght
- Imagine you’re picking a car that needs to last a lifetime: “I would read the manual about 5 times and I would always keep it garaged. If there was the least little dent or scratch, I’d have it fixed right away because I wouldn’t want it rusting. I would baby that car, because it would have to last a lifetime.
- “That’s exactly the position you are in concerning your mind and body. You only get one mind and one body.” And it’s got to last a lifetime. Now it’s very easy to let them ride for many years. But if you don’t take care of that mind and that body, they’ll be a wreck 40 years later, just like the car would be.”
- “It’s what you do right now, today, that determines how your mind and body will operate ten, 20, and 30 years from now.”
Where You Should Work
- “It’s crazy to take little in-between jobs just because they look good on your resume. That’s like saving sex for your old age. Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.”
Can You Buy Love?
- “Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you. I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.
- That’s the ultimate test of how you have lived your life. The trouble with love is that you can’t buy it. You can buy sex. You can buy testimonial dinners. You can buy pamphlets that say how wonderful you are. But the only way to get love is to be lovable. It’s very irritating if you have a lot of money. You’d like to think you could write a check: I’ll buy a million dollar’s worth of love. But it doesn’t work that way. The more you give love away, the more you get.”
Finding The Right Spouse
- How do I find the right spouse? Marry up, he said (not in terms of money).
Advice To Students
- Warren always gave students advice to pursue their passion, but the examples of passion he used, like becoming backgammon champion of the world, were competitive at their core.
- His advice to students would be “Getting rich quick wasn’t the worthiest goal in life.”
Doing The Right Thing
- How do I know what’s right? “Follow your Inner Scorecard”. What should I do about a career? “Find something you are passionate about. I only work with people I like. If you go to work every morning with your stomach churning, you’re in the wrong business.”