Six Things I Learned from my Encounter with Warren Buffett

Warren Buffett has amassed over $70 billion primarily through investing. Few argue against the fact that the 86 year old is the greatest investor the world has ever seen. I recently had the opportunity to spend an entire day listening to him and absorbing knowledge.  The occasion, Berkshire Hathaway’s shareholder meeting, drawing over 40,000 to CenturyLink Arena in Omaha, Nebraska.  As you can see in the cover photo that I snapped, to say that Buffett is a celebrity at this event would be an understatement.  My dad, brother, and I showed up at 5:45 AM on this Saturday only to find ourselves waiting in a long line for the doors to open an hour later!

While there was a lot to be gained, not all of it was directly related to finance or investing. Sparing you the time, the long drive, and the early wake-up call -- here are the 6 most important learnings from my experience:

1.    Index Funds are a Good Place to Invest 

Before the Q&A session began, Buffet introduced the members of his Berkshire Hathaway Board of Directors along with a few others in attendance.  He made special mention of his 88 year old friend Jack Bogle, who is the founder of Vanguard, the largest provider of mutual funds in the world.  Buffett credited Bogle as the one to bring low cost index funds into existence. Furthermore, he suggested that these funds have saved investors tens of billions of dollars in expenses over time without a drop off in performance.   

Interestingly, Buffett also shared that he has plans in place for his wife to invest most of her assets in index funds, after he passes away, because they are simple to invest in, and because it is difficult to beat the S&P 500 over time.  I was very surprised and encouraged to hear that the man who has made billions of dollars by actively trading stocks over his lifetime would recommend a passive investment approach for his wife.  This was especially encouraging to me because I invest most of my own money in passive index funds, as do many of my clients.


2.    Be Rational, Not Brilliant When it Comes to Investing

It was claimed that the investment business is becoming more difficult.  More affluence, better technology, and a greater obsession with finance and investing is driving up competition.  Buffett indicated that the advantage he believes he has over newcomers is that many investors try to be brilliant, while he simply tries to be rational.


3.    It’s Okay to Lose Money, but Not Okay to Lose Your Reputation

Buffett frequently mentioned how important it is to do the right thing.  He adheres to this value when running his company, and looks to invest in companies that put their reputation above making money, as well.  His well known quote on this topic is, "It takes 20 years to build a reputation and five minutes to ruin it.  If you think about that, you'll definitely do things differently."

4.    A Lifelong Friendship is Invaluable

In 1959, the then 28 year old Buffett met Charlie Munger, who was in his mid-30s. Both were already successful businessmen and investors. They’ve remained best friends 58 years later. It was the two of them who answered questions together for seven hours during the meeting. Throughout this time, they frequently referenced their friendship, respect for one another, and how they wouldn’t be who they are today without the other person.  This reinforced the value of deep friendships that last across the many seasons of life.  God uses these relationships to help us to grow and thrive in our sanctification.

5.    Live your Whole Life for Something You are Passionate About

Most people have a goal of retiring in their 60s, but here were Buffett and Munger at ages 86 and 93, respectively. They commanded the attention of a full arena of people for an entire day. The topics bounced around, but their passion and engagement with the subject at hand never once wavered.  This was a reminder to me that every day is a gift from God and that I’m called to use the gifts that God has given me for as long as I live (described in greater detail in my past post titled "Is Retirement Biblical?").

6.    We are all Equal at the Foot of the Cross

Buffett has a tradition of kicking off the annual meeting by challenging other notables in attendance (who included his good friend Bill Gates) to what he calls a ‘Newspaper Toss’. This is a shout out to his own roots, where he delivered over 500,000 newspapers as a delivery boy before getting into investing. I was in earshot of Buffett and Gates for the 10 or 15 minutes that the competition lasted (I believe Buffett won, by the way).  

While it was pretty cool to be so close to the action, it was clear to me that at the end of the day these two men are really just people. For a moment, I was able to look past the fact that their collective net worth is roughly the same as the GDP of New Zealand. They had very normal conversations with people, and their actions were those of normal human beings. 

This was a reminder for me that when we pass away and stand before God what we have accumulated on this earth will not matter.  Warren Buffett, myself, and the janitor who cleans up after the event will all be seen equally as sinners. Our only hope is faith in what God’s son Jesus accomplished when he died on the cross for our sake. It saddens me that, despite having given away more money to charity than almost anyone to walk the face of the earth, Warren Buffett also proclaims to be agnostic, not believing that Jesus has died for his sins.  My prayer for Warren Buffett, and for each of us, is that we’ll bend a knee to Christ and understand that the wealth we accumulate this side of heaven will, eternally speaking, be destroyed by moth and rust. 

May we see our personal finances as a conduit to Kingdom work, and therefore manage them in such a way as to build up our treasures in heaven!

 

About Wacek Financial Planning

Founder, Ben Wacek, is a fee-only, Certified Financial PlannerTM who has a passion to help people of all income levels make wise financial decisions and steward their resources from an eternal perspective, using Biblical principles.  If you’d like to learn more about Wacek Financial Planning, please visit www.wacekfp.com.

 

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