Billionaire investor Warren Buffett is renowned for imparting worldly wisdom to demonstrate key investing and life strategies that have made him one of the wealthiest people in the world.
Talking to the students of the University of Southern California 1994 Commencement SpeechCharlie Munger, his lifelong partner at Berkshire Hathaway, shared a story about a lesson Buffett loves to teach in business schools.
Buffett’s “20-Slot” Rule
According to Munger’s account, Buffett likes to tell students, “I can improve your ultimate financial well-being by giving you tickets with only 20 slots so that you have 20 punches—which is the sum of all the investments you’ve made in your lifetime.” represent. . and once you’ve punched through the cards, you can’t invest any more.”
“Under those rules,” Buffett says, “you’ll think really carefully about what you did and you’ll be forced to load up on what you really thought. So you’ll do so much better.”
Munger tells USC students, “To me, it’s clear that the winner has to bet very selectively. This is obvious to me from very early life. I don’t know why it’s obvious to a lot of other people.” Not there.”
The reason it may not be clear to most people is that often we start and stop what we think are great ideas that aren’t really that great. We Could Bet on 20 Great Ideas in Our Lifetime — If We Even get Many – and wrongly – assume they will become profitable. “Three or five or seven” can make you rich, Buffett says, “but what you can’t do is get rich by trying a new idea every day.”
This Buffett rule of filtering out the best ideas (in favor of one or two great ideas) has a useful life application outside of money and investing. It forces us to focus—something Buffett is all too familiar with. He once said:
The difference between successful people and really successful people is that really successful people Say no to almost everything.
Too often, we encounter tempting distractions disguised as “another great idea.” A former business acquaintance of mine was known for pursuing one – supposedly – great idea after another, but he didn’t really follow through on his commitments. Instead, he usually left projects half-finished before pursuing his next interest or “good idea”.
force yourself to load
The strength of Buffett’s “20-slot” rule is “forcing yourself to load.” In other words, as Buffett taught, whatever ideas you’ve really put into serious thought for years or maybe even decades—things you’ve researched, invested in, and diligently crafted yourself—they’re the primary focus. Must be with all your energy and inspiration.
When you “load up” on turning an ordinary good idea into an extraordinarily great one, you are showing the unusual perseverance most people lack only in good ideas, which is to be great at one thing, not at all. that good or mediocre in many.
Using Buffett’s “20-slot punchcard” illustration, it is wise to use each slot as a long-term phase of focused work toward achieving that one big goal. Since you only have 20 slots in a lifetime, don’t try and abuse your punchcard. For example, a slot could be a two-year phase of mastering an important skill or habit; Secondly gaining the discipline and mindset to accomplish your goals.
When you resist the distraction of chasing things that don’t really serve you and wholeheartedly focus your attention and attention on the things that you do, you will reap the returns. It is a half-hearted dedication to pouring one’s entire existence into a longer period, rather than a short season. When you do this, you are practicing the 20-slot rule and your chances of success will increase significantly.