Warren Buffett's Best Investment Advice (It's Not What You Think)

Warren Buffett, one of America’s wealthiest people, is famously followed for his investing views and strategies.

And why not?  As chairman of Berkshire Hathaway, Buffett has led his company, through acquisitions and investments, to exponential growth.  A $1,000 investment in Berkshire Hathaway in 1959 is worth $25 million today!

And yet Buffett, known as the “Oracle of Omaha,” is now talking about an investment that is even greater.  During the Q&A session at Berkshire Hathaway’s annual meeting in 2008, Buffett said:

The most important investment you can make is in yourself. Very few people get anything like their potential horsepower translated into the actual horsepower of their output in life. Potential exceeds realization for many people…The best asset is your own self. You can become to an enormous degree the person you want to be.

In an ABC news interview in July of 2009, when asked whether it is still important for families to send their children to college or higher learning, Buffett said:

Generally speaking, investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you.  They can run up huge deficits and the dollar can become worth far less.  You can have all kinds of things happen.  But if you’ve got talent yourself, and you’ve maximized your talent, you’ve got a tremendous asset that can return ten-fold.

He went on to say that he doesn’t mean that everyone should go to college.  And he added that learning communication skills are tremendously important for everyone.

Buffett recently appeared in an online animated series called the Secret Millionaire’s Club in which he teaches kids about finance and investing.  Appearing on CNBC in July of 2009 to talk about this new venture, Buffett was asked, “What’s your hope that kids will take away from these episodes?”  His reply:

Well, one way or another you develop financial habits when you’re very young.  And the habits you develop live with you for the rest of your life.  So if we can get through to some young people that it’s better to be a little bit ahead of the game than behind the game, watch out for credit cards.  The most important message is that the best investment you can make is in yourself. Teaching them if something’s too good to be true, it probably is, and so on.  If they learn those things the easy way through these stories early on, it may save them learning it the hard way later on.

…Like I said, the most important message you can deliver to a young person is that anything you invest in yourself, you get back ten-fold. And nobody can tax it away, they can’t steal it from you.  So we’ll be trying to deliver those messages.  You have to do it with a good story.  They’re not going to watch it to get a lecture.  They’re going to watch it to get entertained, and in that entertainment we hope there can be a good message.

So, what are some of the best ways you can invest in yourself?

1. Create your own personal development plan. A good one helps you define your preferred future (your dream life), clarifies your life’s purpose, evaluates your current reality in the basic areas of life (financial, family, career, health, spiritual, etc.), reveals your personal values for each life area (the beliefs that are important to you), sets well-defined goals, and creates a specific plan of action.
2. Be a lifelong learner.  Read good books and resources.  Take classes (formal or informal).  Attend webinars and listen to podcasts. But don’t stop there – you’ve got to apply what you read and hear, and take action!
3. Surround yourself with people who will help you achieve your goals and dreams. If you have friends or family who are downers all the time, or who don’t believe in you or your goals, get new ones.  I don’t mean that you replace your friends or family, but find some new ones to add to the mix.  We all need to have positive people in our lives.  And maybe you need a mentor or coach who can help you take action on your goals.
4. Improve your communication skills. Buffett mentioned this in one of the interviews.  Communication skills are extremely important today.  And not just in how to be a great speaker, but also a great listener.

What do you think about Buffett’s assertion that the best investment you can make is in yourself?  What do you think are some of the best ways to do that?

This was re-posted from my personal growth blog.