Warren Buffett’s way of choosing his goals
“I can’t be involved in 50 or 75 things. That’s a Noah’s Ark way of investing – you end up with a zoo that way. I like to put meaningful amounts of money in a few things.”
There is this one perspective we haven’t explored so far, i.e. getting rid of few goals can really help a lot with the rest.
An interesting story about the legendary investor and philanthropist Warren Buffett shows us exactly that. As one of the richest and most successful people on the planet, he’s definitely in a position of authority to talk about achievements. So, it is worth to hear him out.
It’s about the “5-20” rule which we borrowed for our system.
It was on his jet when Warren Buffett and his longtime pilot Mike Flint started discussing some personal as well as professional goals. At some point, the businessman challenged his employee to complete a list of 25 long-time dreams.
At first, Mike had some difficulty getting it done but in the end he did it. And then came the really hard part – to circle the top 5 most important of them.
He did his best to review and after thoughtful consideration made his mind.
Then Buffett asked him what’s next, what the plan to proceed was.
The guy replied he wouldn’t be wasting any time and would start the same day.
“And what about these other 20…?”, asked Warren. The pilot replied something in the line that those other 20 things will be a close second in his efforts.
To which Mr. Buffett gave him the “lecture”, “No. You’ve got it wrong, Mike. Everything you didn’t circle just became your ‘avoid at all cost list.’ No matter what, these things get no attention from you until you’ve succeeded with your top 5.”
So, we get to the point with the…
The moral of the story
There is nothing wrong with the priorities. It’s just that the one who is the most focused wins the game.
The key is the “avoid at all cost list”. The conclusion is so obvious:
You cannot do it all at the same time. If you want to get something done then do concentrate as much as possible on this one thing.
Before we can continue with why it is a good idea to forget about some of your objectives let’s answer the question that may be already on your mind.
Who in the world would be having twenty-something goals!
You will be surprised, but you must be one such person, and the guy next to you too. You might have even more. Who knows!
It’s not hard to prove that. Think of all your past interests and ideas but not just those of late, go further back – a month, a year ago…
Didn’t you want to learn Spanish and climb the Himalayas? How about learning to play the guitar? Do you surf yet?
If you reflect for a moment or two you will dig out more than a few well-forgotten dreams. They may not be always out there on the surface, but they are still lurking under. And if you make the conscious effort you can generate many more.
It will come as no surprise at all that some of them might actually be the ones that are truly your thing, and yet they are deeply buried.
Let’s see now what the benefits of being fully aware of your priorities are. And then we’ll answer the question of why everything else should be put on the back-burner.
Don’t allow yourself to be distracted by too many things and then a win will follow
There are three main reasons.
First of all, when you drop some of the less important things, you free up more resources which to apply in a focused way in a direction that will actually move you forward.
Secondly, such a choice gives you a long-term perspective. Things you choose not to act on today simply go under the radar and in the future, they can pop up again. For example, when you give them the necessary precedence they will come back in the spotlight of your goal setting.
And last but not least, you get to register much more progress on the high priority objectives. This is a great opportunity not only to do more but also to do it better.
Let’s dig in further in this.
# 1 Focus
Speaking of the many hobbies, interests, and future endeavors that are spinning in your head, have you looked from the following point of view?
The problem is that you might have too many to choose from. No matter how carefully and thoughtfully you might be handling the situation you won’t be able to work effectively on the really pressing ones. It’s a special skill to be able to choose wisely what to say “No” to and for how long.
Evict them from your agenda but write them down. Then make this promise to yourself, “I will not act on these for now”. If you keep your own word then you will see right away how much extra time and energy you will be releasing in the direction of the ones that are on your plate right now.
There is a good reason to give up some of the goals, twenty or so of these that are too much of a distraction.
It’s normal to feel tempted though – the “forbidden fruit” effect is in play here as well.
Save yourself from salvation
Human nature commands us to seek the exciting and the fun which gives us a much-needed reprieve from the drudgery of modern life. You may be fully conscious of the nature of this escape and yet you treat it as a “salvation”.
It doesn’t require much restraint to embark on a new and seemingly interesting hobby when things get tough with the goal you are toiling at the moment. What you actually get is losing time, energy and focus.
So, put them in a lock box and give the key to a true friend, aka your Buddy.
# 2 Long-term perspective
Usually, the top 5 are not short-term.
People intuitively deem significant those ideas which reflect best their own attitudes and aspirations. This also gives them a strong sense of being right about their “Why?”.
Most likely you are no exception and when prioritizing you will probably mean things that must be good and positive for a conceivable period of time, i.e. being part of your future. These usually are catalysts to your own personal development and are oriented towards acquiring new skills and honing your talents or a cause that brings you a sense of value and meaning.
As you can see all of the above are things you want to stay with you for life.
There is time for everything
One of the basic concepts in our system is that a realized vision gives you the confidence, and therefore the peace of mind, that you can achieve anything. But that takes time and effort, and discipline not to give in to the temptation of a new and fun looking goal.
If you are overly ambitious and are embarking on a dozen different ideas you are actually setting yourself up for failure.
For us, 5 goals per quarter are the maximum, and 3 are optimum. We often hear this one, “Which should I give up, health or kids?”
How to choose
It’s simple. Make an appointment with your family doctor and bring the kids with you!
Seriously though. There are various strategies for approaching this. You can acquire a habit for acting towards an objective first and for the next period you will have an invaluable new tool at your disposal. Or, you can combine the steps from several visions, for example.
A vision spares you a torturous process of selecting. Instead, you are 100% sure about your choice. Pretty much almost everything is important, but not at the same time and not to the same degree.
The truth is simple, though hard to practice:
You handle a dozen goals by focusing on, let’s say, 3 of them now and in the next quarter you deal with three others. Doing this your chance for success on all of them is much greater than when you try to work on all of them at once.
# 3 You achieve more in what matters more to you
Last but not least, we want to emphasize one underestimated benefit of having a list of those things that are to be avoided.
As a consequence of this, you have the opportunity to give 100% to what’s foremost. This will result not only in being able to reach more of your goals but also to do it in the best possible way.
Because if you say “Yes” to even one of those that are non-essential, you are actually saying “No” to all of the top priority ones. It can’t be more clear-cut an example of the zero-sum game principle.
There is yet another positive side-effect. Being able to effectively apply this and ultimately succeeding you are gaining freedom – the freedom to get the best version of yourself in any given aspect.
And now it’s time to try these 3 easy steps.
- Write everything down on a piece of paper. And we mean everything that can come to your mind – small and big goals, ideas, grand plans as well as the smallest of a task. Then to the right of each, you answer with few words why it is in there.
- Review thoroughly the whole thing and grade each by its value to you. Use any marking you prefer (from 1 to 10, with asterisks or any other symbol).
- Circle the top 5, and make a new list for the rest (20 or more). Title it “I won’t do anything about these in the next 3 months.”
And that’s all that there is to Warren Buffett’s way.
Do it as we do it in our system
Give your top 5 a good definition as required by our system. Make them 90-day action goals. Let them represent what you will do all by yourself and not be dependent on the final result.
Work on them each week with one step at a time and make steady progress.
At the end of the quarter you have to recap but also look at those 20 and if needed you can re-evaluate and grade them differently. That’s the moment to get your Buddy to assist.
The Buddy’s way
That’s how we do it.
We are not inventing the wheel here. On the contrary, we just have a great deal of interest and belief in the technology of success. And what we’ve discussed today is one example of how we make our system even better.
We learn of some new idea and if we are intrigued then we try to employ it. We change it according to our principles and rules. We also have to adapt it to our times and society, and if it works, we then integrate it. In the end, we have secured yet another way for “GoalBuddy” to be of value and help to you.
For this purpose, we pay much attention to the feedback of the people around us. We sincerely believe you must be one of those who can contribute as much as one Warren Buffet. So we’ll be more than glad to hear back from you what your thoughts on today’s article are. Thank you very much!
*Warren Buffett is a famous American businessman, investor, and philanthropist, acknowledged also for his charity activity.