Harvey Mackay Academy's Blog

Warren Buffett’s 4 Rules For Success

I love to study creative and successful people.  And who better than Warren Buffet, the Omaha multi-billionaire and chairman of Berkshire, Hathaway, Inc.

He recently listed the four common-sense principles that contributed to his mega success, and here’s my take on his formula for prosperity.  Unfortunately, they are not commonly practiced.

Number one is to choose your friends wisely.  I have friends whom I’ve known since I was a little boy, friends from college, friends who started out as business contacts, golfing friends, friends who share my passion for community service, and friends I met last week.  And they all have one thing in common:  We like each other for what we are, not what we want each other to be.

Greek philosopher Socrates was asked, “What is the most beneficial thing a person can acquire?”  He answered, “A friend who gives sincere advice.”

I am fortunate to have friends who aren’t afraid to ruffle my feathers when it comes to advice.  If I need to adjust my attitude, alter my course, back off or move forward, I have friends who will tell me.  And because I value their friendship, I listen.  And I will return the favor, if necessary.  And we will remain friends because friendship is like a bank account:  You cannot continue to draw on it without making deposits.

Buffett’s second point is continuous learning.  I’m a big believer in lifelong learning.  You don’t go to school once for a lifetime; you are in school all your life. 

We can’t put enough of a premium on the importance of education.  Education can help avoid the high price we pay for experience – the great teacher that helps us gain knowledge and avoid making the same mistake twice or three times.

Education is an investment and never an expense.  Consider education a capital improvement.  Don’t be ashamed to borrow, particularly to replenish your professional inventory.  In fact, self-improvement is the one area in which you should really increase your spending, not decrease it.

I like to say, if you think education is expensive, try ignorance.  So why not make continuous education a new priority?  Learning is like riding a bicycle.  You don’t fall off unless you stop pedaling.

Point number three is to improve your communication skills.  Buffett said:  “If you improve your communication skills, I will guarantee you that you’ll earn 10% to 50% more money over your lifetime.”

It’s been said that a message sent is only as good as the receiver’s perception of it. Verbal communications tend to create confusion and misunderstanding for a remarkably simple reason:  the 500 most commonly used words in the English language have more than 14,000 definitions. 

To make communication really work, we need to make sure the people we’re communicating with understand what we are saying as well as we do.  Communication requires both effective sending and receiving.  To avoid a breakdown in communications, break down your message so that everyone can understand it.

Buffett’s fourth point is the ability to say no.  Why is it so hard to say no?  It’s just a tiny two-letter word, but it is tremendously liberating.  So why do we feel so guilty saying no? 

Some people have a great sense of duty and obligation.  They feel like they have to say yes to almost anything they are asked to do – and end up feeling resentful and burned out.  Remember, taking care of yourself is important, too.

Let me just add, from a management perspective, I love when people are willing to take on extra tasks when necessary.  I do not love when their work is substandard or their usual responsibilities suffer just so they can prove how many balls they can juggle at one time.  That tells me that they are weak on time management.

Saying no is not the same as saying never.  It’s an acknowledgement that you respect yourself as well as the person doing the asking.  Believe me, it won’t stop them from asking again!

One of my favorite quotes from the Oracle of Omaha represents what I believe to be an intelligent approach to both business and investing:  “Be fearful when others are greedy and greedy when others are fearful.”

As Warren Buffett knows, the real opportunity for success lies within the person and not in the job.

Mackay’s Moral: One more Buffett gem: “You only have to do a few things right in your life so long as you don’t do too many things wrong.”

About the Author Harvey Mackay, Founder & CEO

Seven-time, New York Times best-selling author of "Swim With The Sharks Without Being Eaten Alive," with two books among the top 15 inspirational business books of all time, according to the New York Times. He is one of America’s most popular and entertaining business speakers, and currently serves as Chairman at the MackayMitchell Envelope Company, one of the nation’s major envelope manufacturers, producing 25 million envelopes a day.

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