Warren Buffett’s 7 Secrets for Living a Happy and Simple Life | Hacker News Reader

Warren Buffett’s 7 Secrets for Living a Happy and Simple Life

successsoul.com

31 pointskyro17 comments

The secrets:

1. Happiness comes from within: "In my adult business life I have never had to make a choice of trading between professional and personal. I tap-dance to work, and when I get there it’s tremendous fun."

2. Find happiness in simple pleasures: "I have simple pleasures. I play bridge online for 12 hours a week. Bill and I play, he’s “chalengr” and I’m “tbone”."

3. Live a simple life: "I just naturally want to do things that make sense. In my personal life too, I don’t care what other rich people are doing. I don’t want a 405 foot boat just because someone else has a 400 foot boat."

4. Think Simply: "I want to be able to explain my mistakes. This means I do only the things I completely understand."

5. Invest Simply: "The best way to own common stocks is through an index fund."

6. Have a mentor in life: "I was lucky to have the right heroes. Tell me who your heroes are and I’ll tell you how you’ll turn out to be. The qualities of the one you admire are the traits that you, with a little practice, can make your own, and that, if practiced, will become habit-forming."

7. Making money isn’t the backbone of our guiding purpose; making money is the by-product of our guiding purpose: "If you’re doing something you love, you’re more likely to put your all into it, and that generally equates to making money."

The secrets through a warren-pass filter:

1. "In my adult business life I have never had to make a choice of trading between professional and personal. I tap-dance to work, and when I get there it’s tremendous fun."

2. "I have simple pleasures. I play bridge online for 12 hours a week. Bill and I play, he’s chalengr and I’m tbone."

3. "I just naturally want to do things that make sense. In my personal life too, I don’t care what other rich people are doing. I don’t want a 405 foot boat just because someone else has a 400 foot boat."

4. "I want to be able to explain my mistakes. This means I do only the things I completely understand."

5. "The best way to own common stocks is through an index fund."

6. "I was lucky to have the right heroes. Tell me who your heroes are and I’ll tell you how you’ll turn out to be. The qualities of the one you admire are the traits that you, with a little practice, can make your own, and that, if practiced, will become habit-forming."

7. "If you’re doing something you love, you’re more likely to put your all into it, and that generally equates to making money."

Also note that this is just a list of some things that Warren Buffet has said. It's not his list of 7 "secrets".

Although the title is cheesy, these are really great points. I wouldn't call them "secrets" as much as common sense and great advice.

While I respect him as a businessman and as a person, it kind of surprised me when he gave all of his money to the Bill and Melinda Gates Foundation. You'd think that someone as opinionated as Buffett would have some ideas about how to apply billions of dollars to make the world a better place.

My favorite is number 4: "I want to be able to explain my mistakes. This means I do only the things I completely understand."

While I would generally agree that his advice is more "common sense" than any amazing "secrets", the issue lies not in knowing what to do, but rather in doing it. Many of us have heard Buffett's rules before in one way or another, and some of us may even preach them to others, but how many of us actually live by them ourselves?

Well, a lot of his advice is easier to follow when you're Warren Buffett. It's easy to enjoy every day at work when you're the boss, your employees all love you for making them rich, and you've already achieved every goal you could reasonably have.

If he is genuine about living simply (which I believe he is) then he didn't want to deal with the responsibility of figuring out how to use the money. better to make a one shot donation and never have to think about it again.

I'd do the same thing if I was old and had more money than I could possibly use. Here's how I would think about it: I enjoy investing. I don't necessarily enjoy running a massive philanthropic organization. I shouldn't have to do things I don't want to do, I'm old and rich. Here Bill, you take it. Now I get to feel good about myself.

I think Warren Buffett did the right thing by giving his wealth to Melinda and Gates Foundation. This foundation has a vision and it goes well with Buffett's vision.

Number #5 needs some clarification. Apparently he doesn't believe this to apply to himself since he didn't make his riches by investing in an index fund. I don't know in what context he said it, probably he means it's the best strategy for the average investor. Quoting Buffet again: "Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."

There are very few people who have done better than the market over a long period of time. So unless you are as skilled as Buffett, you are better off with low cost index funds.

On average, shouldn't roughly half of investors do better than the market and roughly half do worse?

In practice, it's more like 25% do better than the market and 75% do worse. This is because those who do better tend to do much better, while those who do worse tend to do only slightly worse. (Remember, if you don't short your losses are capped at 100%, while your gains are potentially infinite.) Mean/median confusion strikes again.

I'm not suffering mean/median confusion (note I said "roughly"), I'm just not convinced the distribution is quite as asymmetric as you think(despite, as you say, being capped at zero). But we don't have any numbers either way, so shrug.

Could've sworn the roughly 75% figure did come from data (thought it was a Berkshire Hathaway annual report, and it may've been 70% or 80% or something in between), but I can't seem to dig it up, so I guess we'll have to leave it as idle speculation.

In addition, if you are an investor and you do poorly, you may just drop out of the market. On the other hand, if you are a winner, you'll stay in the market.

In this way, you can have a lot of investors losing their money with a fewer # of people gaining.

Buffet has said unless your going to make a full time passion/profession/obsession out of it, get index funds.

He doesn't have a computer at home and plays 12 hours online-bridge per week. It seems like he is playing games at the office. No wonder he is tap dancing to work... ;-)

Not to play devil's advocate or disagree with the general message, with which I agree, but Warren Buffett can live in a three-bedroom house in Nebraska. He's immensely talented, extremely well-established, and in a position where his business is entirely results-oriented, so he doesn't have to answer to anyone.

Most people who get caught up in the status bullshit don't start out that way, but develop those obsessions and complexes in order to climb the corporate ladder. They buy fancy cars and apartments to appear "hungry" to their bosses and co-workers. Eventually, they're interested in the status symbols to further their career progress, and interested in that career in order to buy more status symbols; this mixture of toxic attitude and environment becomes cyclical and, once one has a wife and kids, somewhat inextricable.

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