The One Word that Defines Warren Buffett

There’s no scorecard in life; we are free to be—but it doesn’t always feel that way.

I was home sick last week—the type of sick that takes you out of action and sends you straight to the coach for the day.

So what does this mean? Rest and get better, and YouTube.

One conversation that stuck out was Warren Buffett’s relentless pursuit of his investment strategy.

One that no one on planet Earth had ever created.

He followed no one.

He dreamt of it and built it with no path to follow.

And for the millions of people

Buffett has inspired tens of millions of investors over his 75-year investing career, whether through his cheeky annual letters, exclusive morning interviews with Becky Quick on CNBC, or his savage one-off interviews or speeches he occasionally makes.

With how long he has been in the game, we take him for granted.

Furthermore, many of us are following in his footsteps.

Buy great companies, own a lot of it, and hold. No matter what.

This sounds second nature, but we would not know these things without Buffett.

Buffett has had no warn path before him, no mentors he can look up to, no reference points; it’s been him figuring it out in real-time.

And we’ve watched him pull deals out of nowhere – and crush it.

And have fun.

Here’s the deal: it’s worked because he was made to do this stuff.

He does what he wants to do.

I find this deeply challenging. We’re all inundated with content, mostly content trying to make us behave a certain way or buy certain things for specific reasons.

It’s so hard to feel like we have this Buffett-type freedom when there appears to be only one giant path leading to mediocrity and financial stress.

The Power of Conviction in Investing

No matter where we are in life, stuff creeps in that makes us wonder.

I think Warren has something that many of us are missing – conviction.

Conviction is this – the ability to say no to a greater yes.

Without conviction, we get lost, and if you’ve ever been lost, you do a lot of extra worrying and walking, which makes you tired.

How do I know? I’ve had both weak convictions and strong convictions throughout life.

This has been particularly true for me as a professional investor.

And when I look back, the strong convictions I’ve possessed, those that I would do anything to uphold, have propelled me forward.

I’m guessing you’ve probably experienced the same thing.

Strangely, they illuminate the path towards freedom.

Developing Buffett-Level Conviction in Your Strategy

When it comes to investing, our convictions are everything.

They create our strategies, help us buy, hold, and sell, and help us avoid mistakes.

So here’s how to develop a Buffett level of conviction in your strategy.

1. Find your why. This sounds so cliche, and it is to some degree. But it’s everything. If you want to retire early, you will need a combination of low expenses and a large portfolio. This is hard to do, but if you want it. You’ll find a way.
2. Invest towards your why. As said above, if you want to retire early, you must invest toward that. Build a portfolio that will accomplish your goals of growth and income. It’s far easier to invest when the why is crystal clear.
3. Say no to things that don’t fit. So you want to retire early and are investing towards it. You start to have some serious money, and you start entertaining a strategy shift. But then you come to your senses and say, “No, it’s not part of the plan.” This is the biggest lesson Buffett has taught us: saying no to things that don’t fit our why.

This is extremely easy to write on a keyboard and extremely hard to practice.

I can’t tell you how much time I have spent answering number 1.

“

This stuff is hard, but if we figure out our path and never stop walking down it, it’ll lead to the most money and, more importantly, freedom.

“

I can recall one conversation I had with myself a few summers ago about my dreams of entrepreneurship and its actual cost to me and my family.

I would love to build a genuinely game-changing company for a large market, but doing so would fly in the face of being a present father to my young kids.

I knew in my heart that the cost of building something that big wasn’t part of my bigger why—having a healthy family.

So I just said no.

This stuff is hard, but if we figure out our path and never stop walking down it, it’ll lead to the most money and, more importantly, freedom.

In Summary,

1. Find your why.
2. Invest in it.
3. Say no a lot.