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Why Warren Buffett Embraces Not Knowing Everything and You Should Too

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While the new generation of billionaire entrepreneurs like Mark Zuckerberg and Elon Musk seem to get involved in everything from space travel to foreign politics, Warren Buffett, the world’s most successful investor and one of the world’s richest men, embraces not knowing everything.

The “Oracle of Omaha” spends 8 hours a day reading, doesn’t use a computer and only invests in companies and industries that he understands. He has generated a 20.9% return on his investments from 1965-2017, more than doubling the average return of the stock market!

In this article, I will look at why Buffet embraces his lack of knowledge of things like tech and complex derivatives and how the average person can apply these 2 pieces of advice to achieve more success!

The most recommended book in silicon valley

“The Outsiders: Eight Unconventional CEOs and Their Radically Different Blueprint For Success” by William Thorndike is the most recommended book among the Silicon Valley crowd and focuses on unusual CEOs such as Harry Singleton of Teledyne and Warren Buffett of Berkshire Hathaway whose returns for investors trounced their peers.

The book found that all of these CEOs used two rules for making decisions:

  1. They view their most important job as the allocation of resources. That sounds a little technical but basically, it means making sure that both financial resources like money, stocks, and bonds and human resources like employees, management, and talent are all being used for their best and most efficient purpose.
  2. They think like investors, not managers. While a manager might need to think about the day to day workings of a business (taking up valuable time by having to learn things like astrophysics from youtube videos for example), an investor simply has to be able to evaluate what something is worth and what others are willing to pay for it. Because of that, investors can focus on creating value to raise the overall stock price.

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” – Warren Buffett

Let’s look at two ways you can apply these ideas to your daily life:

1. Resource allocation can make you more successful

When I say resource allocation, what I really mean is being efficient with your money, time and energy. One of the biggest problems we have as humans is inefficiency! We waste time, energy and money by not allocating our resources correctly. Take budgeting for example. Only about 41% of people claim they use a household budget.

How can you know if you’re managing your money correctly if you don’t keep track of where it’s going? You can’t. But the greatest way we waste our resources is through wasting time. Money and energy can be replenished but time is the one resource you will never get back. How are you using your time?

Are you building a better future for yourself and your family or are you wasting it playing video games or re-watching movies you’ve already seen a hundred times? Being more aware of how you allocate your time, money, and energy while focusing on finding the best and highest use for each will help you become more successful.

2. Think like an investor and you can be more successful

A few months ago I read and reviewed the 50-year anniversary of Buffett’s letters to investors. In 50 years of incredibly well-written, funny letters, Buffet boils down his investment theory to 2 points:

  1. What is something worth?
  2. Does the price reflect value?

In the letters, Buffet revises the old analogy that a bird in the hand is worth two in the bush- unless that is he writes you know exactly how many birds are in the bush and how likely they are to come out.

When thinking about all life decisions from whether or not to go back to school or start your own business, you want to think like an investor and ask yourself what is it worth you to and what price are you willing to pay to achieve this?

“It is not necessary to do extraordinary things to get extraordinary results.” – Warren Buffett

Nothing in this world is free, everything comes with a price if simply in the opportunity cost of pursuing one option over another. Asking yourself if this is something that is worth it to you and if you are willing to pay the price for pursuing it will help you think like an investor and make better decisions.

The world is full of so much information that we cannot possibly take in and understand it all. Instead of trying to learn everything about everything, Warren Buffett and other superstar outsider CEOs focus on the allocation of resources and thinking like Investors, not managers.

Which one of the principles Warren Buffett uses resonates most with you and why? Let us know your thoughts below!  

Jon Lee is a Full Stack Marketer, who specializes in helping small businesses grow to 7 figures. He also blogs about career development and hosts the A Player Podcast where he interviews “A Players” from various fields as diverse as cage fighting and neurobiology find out more at www.Aplayerpodcast.com.

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The 4 Pillars of Wealth and Abundance

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Have you ever wondered what the formula for a wealthy and abundant life is? Many people have. Lots has been written about the subject of wealth creation and living an abundant life. It was a breaking point in my journey and pursuit of success when I found out that there is a clear path to achieve success in life. Thanks to those who have shared their journey, we can clearly see and follow the principles of prosperity. (more…)

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Here Are 4 Reasons Why You Should Have a Podcast, Youtube Channel or Online Show

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Confidence comes from a place of strong understanding of self. After close to three years on radio, I’ve grown from a shy introvert to a shy introvert with an extrovert persona. When the mic is turned on, I can channel a version of myself that some say is attractive, strong, and of course, confident but it wasn’t always this way.

What I want to share with you is what I discovered on this journey into broadcast that you can apply to your life, your ventures, and your personal development. This doesn’t require any fancy gear. It does require a leap of faith on your part because once you go down the road of media; it can change your life.

1. Perceived Expertise

When you go to a doctor, you expect their knowledge will guide them to a solution to your problems. When you have a show, you become your listeners’ doctor. For all the multiple thousands, maybe millions, of YouTube channels, podcasts, and user-created content in the world, each person that gets behind a mic takes a position on their passion, their opinions, and their themes.

They challenge the status quo for the benefit of their listeners in hopes to entertain and educate. With consistency on your side, those fans place you on a platform and give you permission to influence them.

2. Global Acknowledgement

One of the benefits to increasing confidence is when you receive thank you notes from people you may never meet. The feeling of enriching someone’s life from halfway around the globe, provides validation you’re enhancing someone else’s life with your wisdom and your wit.

The very first time I was told I was making a difference in someone’s life in a country other than my own, I felt like I caused massive impact that transcends my circle of influence. When you experience just how much you can cause impact and it comes back to you, it’ll change your worldview.

“Be grateful for what you have and stop complaining – it bores everybody else, does you no good, and doesn’t solve any problems.” – Zig Ziglar

3. Backed By Numbers

One of the most exciting ways to measure success is to quantify your growth. It’s not enough to just broadcast. Having subscribers and downloads helps to know, numerically, how well you’re doing. Word of caution. This can be a way to set yourself up for distress because of number envy but if you understand what the numbers mean; you can control the narrative of the numbers.

The major number that makes most people smile is 10,000. I’d advise it to be 1. Here’s why. As you grow in your industry, so does your reach. If you learned that the one person that subscribed totally changed for the better because of you, wouldn’t that be worth the effort?

4. Effective Communication

While it’s not talked about much, having a show is documentation. You create a dynamic account of your life, your industry, and the pulse on what’s important simply by having a show. When you find a channel to improve your communication skills, you demand attention and people will listen to you. You become more trusted as a leader and people will follow you once they believe you can lead them to their wants and needs.

“To effectively communicate, we must realize that we are all different in the way we perceive the world and use this understanding as a guide to our communication with others.” – Tony Robbins

These insights have helped many people become leaders and, ultimately, move others to their best selves. It’s worked for me and I hope it works for you. At the end of the day, it’s all about showing up and showing out.

Have you ever thought about having a radio show? If so, what would you talk about? Let us below!

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7 of the Biggest Enemies Stopping You From Success

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Everyone wants to be successful. It is a thing we all wish for. We want to achieve mind-blowing success. However, the road to success is not so easy. And the funniest part is, you are the one to determine whether you become successful or not. (more…)

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The Key to Success: Understanding and Constructively Using Our Influence

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All humans strive for success, although not all of us think about success in the same way. Yes, there are many stereotypical views of success and sometimes these views can get in the way of individuals realizing that they actually have already achieved it. (more…)

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