Lesson 1

Leadership Coaching with Warren Buffett

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Executive Summary

This article talks about three things: maximizing assets and potentials, valuing what one already has in hand, and making it even better.


The biggest financial assets anyone has is the value of his earning powers for years. To achieve a dream, it requires the proper use of diligence and intelligence. How one person uses both relies on what he chooses to take action. Two things that can hold back a dreamer are lack of education and terms of habits. Anyone who has education is one step forward to his dream. A dreamer without education will probably have a hard time, so he needs to make more effort. There is a difference in the potential between the educated and the uneducated; the uneducated never unlocked his. However, there is an alternatives to things that a person can’t do anymore: change.


The process of change should be done when a dreamer is still young, because the process of change doesn't work at an old age. There is a saying that goes, "Old habits die hard". The best time to change is during a young age. One way to practice change is by avoiding credit cards as it only increases debt and impulsiveness. Credit cards only make people pay more and more.


Maximizing talents is the best way to secure a financial future. It's not about earning how much, but about using the best potentials to its extent. Potentials can't be taken away nor taxed. It's like one person's "net income".

Because the generations before today's generation worked hard to achieve success, the average person today lives so much better than the richest person in the USA 200 years ago. The society is good and is even getting better. In fact, technology turned the world upside-down. High-tech is changing the world and is going to change it in a very big way.


With that in mind, the youth today are less likely to face economic problem in the future. The society has already been well established and is even improving. USA holds 4.5% of the world's population. 53% of the valued of corporations publicly traded in the world exists in the USA. Stocks are so good!


With good stocks, Buffett always likes to find businesses with good economics - those with a moat around it. A moat names its product, service or location more desirable for the customers than any other brands. Finding great businesses is very seldom, though. A good investor doesn't need hundreds and thousands of investments; he needs a couple. He doesn't need brain power in the business; he needs discipline. Most of all, he should remember that buying stocks means buying a little piece of the business.


Imagine the world the other way around. What if Bill Gates coaches Berkshire and Warren Buffett coaches Apple? The world's doomed. We need to be in the right position and use our potentials properly.


In the end, the ability to communicate and the world to be aware of it is an advantage. The ability of information to be available to everyone worldwide is the best asset.


Full Transcript


Buffett started the conference with a mind-boggling question: "Would you allow me to buy 10% of your financial future? You are to give me 10% of your earnings forever."


Wealth Talk


The biggest financial assets anyone has is the value of his earning powers for years. Anyone who desires to succeed needs to focus on himself. Most of the time, whatever happens in life depends on how one handles his path. Nobody dreams and leaves his dream there and wait until it gets fulfilled. To achieve a dream, it requires diligence, intelligence, and the proper use of the two. How one person uses both relies on what he chooses to take action.


There are two things that can hold back a dreamer: lack of education and terms of habits. Anyone who has education is one step forward to his dream. A dreamer without education will probably have a hard time, so he needs to make more effort. There is a difference in the potential between the educated and the uneducated; the uneducated never unlocked his.


The terms of habits depends on how a dreamer develops himself and what he does with his development. Integrity, intelligence, and energy are three main factors. However, without integrity, the other two will kill. It's quite challenging to try to change IQ. but anyone can choose to have integrity. Without integrity, the intelligence and energy will not be of great sense. A significant part of the potential will go unused. There are habits that can be developed. Anyone can be smart, lazy, motivated, stubborn, etc. Choosing the right characteristics and desiring to be one is a great factor.


Buffett did all kinds of analysis. He studied and explored, but he didn't do well. However, when he read Ben Graham's book when he was 19, it greatly impacted his life. if he weren't going around investment and stocks 8 years, the book wouldn't have a great impact in him. Part of life in getting prepared, so when the significance comes, we can grasp that and learn from it.


Buffett posted another challenge to the students by telling them this:


First, think about the person you like to be in life whom you'd gladly switch places with. Write the reason why you like to exchange with them. Second, write the person you don't want to be. List the reasons why you don't like them. Now, look at the first. These are qualities that you can be like also. Look at the second. These are qualities that you can be, but better not be. In the end, it's your choice.


The process of change should be done when a dreamer is still young, and he should carry it for the rest of his life. However, the process of change doesn't work when he does it at an old age, because old habits have been well-formed already and are hard to mold again. The best time to change is during a young age.


One way to practice change or better yet avoid going through a hard phase of change is by avoiding credit cards. Credit cards only increase debt and lead people to buying things whenever they want. Credit cards only make people pay more and more. Which is better? Being the borrower or the lender?


The best way to secure a financial future boils down to getting full use of talents. It's not about earning how much, but about using the best potentials to its extent. A person's own ability is his own potential. That can't be taken away from him. It can't even be taxed! The government can't tax what is in one person's head.


People of old age say they were very happy with what they did no matter the salary. Even if it's not high, it's fine because they are enjoying. Being rich is not really the means of getting happy. Most of the time, there's always just enough money. Money doesn't bring everlasting happiness, so in the end, the person who wants to be happy needs to find what he enjoys.


"To trade a decent income in something you love doing for huge wealth is trading your principles. That would be a terrible mistake," Buffet said.


Country Talk


The average person today lives so much better than the richest person in the USA 200 years ago. The society is good and is even getting better.


Technology turned the world upside-down. Warren Buffett met Bill Gates in July 1991. Gates tried to educate him about high-tech. He said the cost of talking to somebody around the world will be close to zero. That's revolutionary. High-tech is changing the world and going to change it in a very big way.


The USA is very blessed as they lead the world in the area of technology. 15 years ago, they had an inferiority complex. They thought Germany or japan were going to take over the world, while USA would flip hamburgers, but then things changed! The high-tech revolution has changed them and they are getting better!


The youth today are less likely to face economic problem in the future. The society has already been well established and is getting better from time to time. USA is a great country. It holds 4.5% of the world's population. 53% of the valued of corporations publicly traded in the world exists in the USA. Stocks are so good!


USA have had all the problems. Those who focused on problems missed the bigger picture - every generation is better than its ancestors. Everyone is far from perfect, but things are always better than yesterday. If given the chance, Buffett would trade places with the youth of today's generation!


Business Talk


Buffett likes to find businesses with good economics - those with a moat around it. A moat names its product, service or location more desirable for the customers than any other brands.


Finding great businesses is very seldom. For Berkshire, they usually find one per year. A good investor doesn't need hundreds of thousands of investments. He needs a couple. He doesn't need brain power in the business; he needs discipline. Most of all, he should remember that buying stocks means buying a little piece of the business.


Imagine the world the other way around. What if Bill Gates coaches Berkshire and Warren Buffett coaches Apple? The world's doomed. We need to be in the right position and use our potentials properly.



In the end, the ability to communicate and the world to be aware of it is an advantage. The ability of information to be available to everyone worldwide is the best asset.