I am listening to an audio of the life of Warren Buffett called The Snowball. Interesting observations so far (half way through the audio book). While these are not overt observations depicted in the book, you can draw the conclusions.
For most folks, their home is where a majority of their wealth is resides. At the time Warren and his wife Suzy purchased their home where he still lives today, he called it a “Folly” understanding that his $100K investment was really a $1M in 30 years. How many of us think of our purchases of cars, homes, shoes, and vices as opportunity costs of what it could be worth in 5,10, 20 or 30 years? Something to think about when you are wanting that new car right after you got done paying off your last car payment.
My second observation is: Those with the most information and knowledge along with a humble disposition will win out over those that are ill informed and/or without humility. Today as back then, Warren reads feverishly reports about his businesses along with possible opportunities presented. How much have you read about the investments you are invested in (401K, IRA, Investment Account)? I have started this process myself. It is definitely a lot of time and effort; however anything worth having requires work…and the harder your work the luckier you get.
My third and by far the most cementing observation is it is better to invest in the “really good” at a fair price than the “really good price” for the fairly good. This applies whether you are talking about buying a business, a home, stock in a business, employees or a product/service. My experience as it relates to hiring employees is to focus on the talent and what their capabilities are in the future and not necessarily their current skills if they are less experienced. If they are more experienced, I am willing to pay more for the experience so we can yield greater results more effectively and efficiently. The saying you get what you pay for…is so true.
We can create our own wealth by taking some tips from Warren Buffett. The Less You Buy, the More You Have.