10 Keys to Making Money from The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
The keys in this presentation are taken from the book The Snowball: Warren Buffett and the Business of Life by Alice Schroeder.
I recommend you get this book for more details on Warren Buffett’s life
Key #1 Love What You Do
Warren Buffett loved playing with numbers.
He loved memorizing dates and statistics, memorized all the stats to baseball players.
He recorded license plate numbers of the cars that went by, always hoping to catch a bank robber or a criminal.
He estimated ages of choir singers to see if they lived longer than others.
He loved making and accumulating money!
Key #2 Take Charge
Warren Buffett learned from being a coronet echo that if he followed someone else, they might mess up, and he would have done a far better job.
So he decided to not only take charge of his finances, he decided he wanted to be a Millionaire by 35 yrs old and not have to work for anyone.
When he created his fund, you were either fully trusting him and blind to what he was doing, or you didn’t join his fund.
Key #3 All or Nothing
When Warren bought out stakes in company’s, such as when he was taking over Berkshire Hathaway, he always told people they either sold him all their shares or nothing.
You are in the deal, or you’re not.
When he closed down his first fund, he also gave people to option to stay or to sell their shares and leave.
Key #4 People Are The Key To Wealth
Warren bought companies based on who the leader was.
If the leader was good, then he would be not only buying the company, but also the leader as well.
In fact, he came to find that companies were doing well because they had a good leader.
Key #5 Stick to the Basics
In personal finances, save money, invest wisely, understand what your money is doing, don’t lend money to relatives or bail people out for bad financial decisions.
When Warren’s sister Doris was in financial trouble for selling naked puts when the market took a downturn, he refused to bail her out.
He felt that the people who convinced her to sell those naked puts didn’t deserve the money.
Even though his sister lost her fortune and her house because of it.
In investing – Does the company you want to invest in make money?
If you were to close it down right now, how much would it be worth?
Do you think the industry they are in will stay profitable?
Key #6 Be Patient – Follow Your Inner Score Card
Warren Buffett told people to buy Geico when he first started advising others in investing. At the time, Geico wasn’t famous or a brand name.
He got invested in American Express when they had a scandal, but he knew over time they would recover.
He invests long term and keeps his own inner score card.
Even when people ridicule him, make fun of him…he knows inside what he’s doing.
Key #7 Surround Yourself With Good People
Warren’s wife cooked for him and took care of him and their children. This freed him up to focus solely on making money.
His partner Charlie Munger was super smart and a great investor as well.
His business associates and friends were intelligent, highly connected or had lots of capital.
He loved meeting and befriending new and powerful people.
Key #8 Negotiate
Warren was famous for a technique he called Buffetting.
He would call and ask if someone would sell for a certain price, they would call back later and say they would.
Then he would tell them it’s a lower price now, and, it would go on and on.
Key #9 Use the Law of Compounding
Warren lives modestly.
He wears pretty plain clothes, and he still lives in the same house that he bought when he was starting his family.
He understands that if he keeps and invests his money it will compound, and so if he spends it, he thinks of the compounded wealth he would have lost.
Hence he is very thrifty but invests a lot.
Key #10 Understand What You Are Investing In and Get Paid for It
Warren always believed that shareholders deserved to get company profits, in dividends or other compensation.
He would go to board meetings and demand it. If they didn’t give it, he would get enough clout to get on the board and change things.
He also never invested in the initial tech craze, because he didn’t understand it. Even when people ridiculed and taunted him, he stuck to his guns.
Conclusion
Warren Buffett is a Billionaire investor, who for years and years never lost any money for his investors.
With the craze around ETF and Index Funds, Warren was an advocate to good old business analysis and investing in specific companies, and not general diversified funds.
He narrows in on quality and gets it.
He’s tenacious, loves what he does, and has the love of patterns and numbers to fuel him.
I hope you got value from these 10 Keys to Making Money from the book
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder.
Let me know your thoughts in the comments, and please share this post with your friends and followers!
About Mey Duldulao
Back in 2011 I had over $30,000 in credit card and line of credit debt, was living paycheck to paycheck and was stressed out over my lack of success in my financial life.
In April of 2016, I became debt free and had a monthly passive income stream. I quit my job on December 23, 2016, and started doing my dream work of mentoring others on what I did to create the freedom to quit my job.
In 2017 we bought our first condo in Waikiki, and we went on 5 weeks of vacation (including a 7 day cruise to the Mexican Riviera)!!!
In 2018 we bought our first investment property!
I spend most of my time doing what I dreamed of for years, spending my days with my son Jordan and my husband Jomel, enjoying motherhood and being a wife. I also enjoy researching Financial Freedom and sharing what I learn with my clients and on my blog.
If you want to learn more about how I can help take back control of your money and your time, then CLICK HERE, watch the free video and get started!