Billionaire Lessons in Prosperity-Building
Warren Buffett is now the world’s richest man, according to the latest Forbes ranking. Worth some $62 billion, Buffett displaced Bill Gates after markets punished Microsoft for its baffling $44 billion bid to purchase Yahoo.
Let’s put $62 billion in perspective: Invested in treasuries at 2%, it’d throw off interest of $3.39 million per day. Just to remind ourselves, a billion is a thousand millions.
Warren Buffett knows how to build wealth, and while he was unavailable to share fortune-building tips with Soul Shelter readers today, my brother Charles, who attends Berkshire Hathaway events in Omaha each year, relayed this anecdote from Buffett’s 2006 shareholders’ meeting:
One shareholder asked a question along the lines of ‘how should I study investing in order to build wealth in my spare time?’
Buffett replied that, for most people, the bulk of their income is going to come from earning power in their chosen profession. Therefore, from the standpoint of building wealth, free time is better spent sharpening one’s professional skills rather than studying investing.
Still, can’t the world’s richest man offer some behind-the-scenes clues to riches? The Internet abounds with Warren Buffett quotes, but here’s a revealing look at the behavior of the man himself, again from brother Charles:
Sunday night we went to a shareholders’ party at Warren Buffett’s favorite steakhouse, a place called Gorat’s. I don’t know whether I can put this diplomatically, but I will bet that in Wayne and Oakland counties, Michigan, it is not possible today to find an establishment as déclassé and frozen in the 1950s as is Gorat’s.
While we were enjoying, or I should say, consuming, our overcooked meals, who should walk in but Bill Gates, who sat down three tables away. He was followed a few minutes later by Warren Buffet. The world’s two richest men soon seemed to be having the time of their lives there in Omaha, chowing down dreadful food (aka ‘The World’s Finest Steaks’ according to Gorat’s roadside sign.)
I told this story later that evening to a waiter at a cigar bar to which we’d retreated. ‘Warren Buffett!’ he said. ‘When he comes here, he tips a dollar for parking the car, and pays two dollars for a Scotch and water from the well. We ask him, does he want a particular Scotch? No, just the house brand.’
Frugality: A primary “secret” of the wealthy.
A few years back, I met Chris Flowers, one of the billionaires who appears on the Forbes list. My buddy and co-author Carl Kay arranged to have him serve as master of ceremonies for a talk I gave in New York about my first book.
The talk, about “cultural arbitrage” by foreign entrepreneurs in Japan, went well, and I was flattered when the billionaire emcee stayed around to chat for a few minutes afterwards. He told me he’d read portions of my book, where I’d written about his own cultural arbitrage in executing what remains one of the largest private equity deals in history.
As we parted, I asked whether I might contact one of his flunkies regarding participation in his upcoming fund.
“I don’t have flunkies,” he replied cheerfully. “Hiring flunkies means we make less money.” Then he offered his card.
Another secret worth remembering: No flunkies, even when you can afford them.
I haven’t met any more billionaires since that day, but I’m taking advice from those two: instead of fretting over my portfolio, I’m buckling down on improving my career prospects—and staying away from flunkies.
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