In a Town Hall event titled Keeping America Great, Warren Buffett and Bill Gates were at Columbia University in New York City on November 12, 2009. Both self-made billionaires, Buffett and Gates are the embodiment of the American Dream. They both put their stock in America and reaped the benefits of the capitalist tradition. Since the financial collaspe and ensuing recession, who better to ask about how to keep America great in the coming years.
This article details the lessons shared by Buffett and Gates during this event.
Lesson 1: Pay attention to the world around you. Buffett suggested that students should learn their ethics in the home rather than at business school. Buffett is suggesting that most students already have a value system in place before attending business school. It is the values displayed by parents, mentors and the world around us that form our values. So pay attention.
Lesson 2: To be successful in life, find what turns you on. Buffett was so passionate about learning to invest with Ben Graham that he offered to work for nothing. Likewise, Gates was so passionate about software programming that he literally created the industry through Microsoft. The secret to success is to find what you are most passionate about and make it your career and life.
Lesson 3: Learn how to disciper a competitive advantage when you see it. Buffett invested in Burlington Northern not because it was a great current value, but because it has a competitive advantage when moving goods throughout America. Burlington Northern can move a ton of freight 470 miles on one gallon of diesel fuel. That is far mor efficient and green than what happens during trucking freight over the highways. By the way, more goods are being produced in other countries like China that will be imported into America and distributed via the rail system. Buffett realizes that this advantage is where he will get a return on his investment in the future.
Lesson 4; Don’t underestiamte the value of a good education today. Buffett made a comment that he would pay any student in the audience $100,000 for 10% of their future income. Doing the math, this equates to a value of $1 million in future earnings just to break even. An MBA student graduating from a reputable business school today will easily surpass $1 million in their careers.
Lesson 5: Cash helps you sleep better at night. Buffett knows that cash is not a good investment but he likes to have enough cash available to handle any issues that come his way. Buffett also said that “you always want to keep enough cash so that no one else can determine your future.” It is not only important to have an emergency fund but you never know when you will need a “kiss my a$$” fund when employment disaster strikes beyond your control.