10 Ways to Get Rich by Warren Buffett

(Source: BusinessWeek.com)

In Parade Magazine, Warren Buffett listed ten ways to get rich.  Here is the list and my comments are below.

1. Reinvest your profits.
2. Be willing to be different. 
   
3. Never suck your thumb.
   
4. Spell out the deal before you start.
   
5. Watch small expenses.
   
6. Limit what you borrow. 
   
7. Be persistant.
   
8. Know when to quit.
   
9. Assess the risks.
   
10. Know what success really means. 
    

Reinvest your profits.

• If you make a little money, refrain from spending it on unnecessary things.  Instead, reinvest your profits in the asset or other investments.  Typically the more you invest, the better off you will be.  Compounding interest as quoted by Albert Einstein is "the most powerful force in the universe."

Be willing to be different. 

• Don't always follow the crowd, be a contrarian.  This is where you will make your money.  Place bets on what the crowd doesn't like and the calculate the risks in doing so.  If the benefits outweigh the risks and you are correct in your assumptions, you will make a bundle when the crowd starts to follow the idea again.

Never suck your thumb.

• Buffett also calls this "unnecessary sitting".  A form of procrastination, determine what you need to do, and DO IT.  Action and execcution are really all that matter.  If the task is large, break it up into pieces and set deadlines to get those pieces done.  It will seem like a much smaller task once you break it up.

Spell out the deal before you start.

• The ability to see scenarios of what can happen and planning on your responses is the best way to get what you want out of negotiations.  Always be prepared.  Understand what the other party wants from the deal and both sides can win.

Watch small expenses.

• Sometimes we lost sight of the little things in life, and in this example are the small expenses.  In general, the more we make, the more we lose track of the little expenses because we feel they don't matter.  Managing your little expenses can save you a lot down the road.  This also applies to doing business.

Limit what you borrow. 

• Living on credit cards and loans will not make you rich.  It may appear to other people that you are for a short period of time until all of the debt becomes apparent.  Work on being debt-free and investing the excess.

Be persistant.

• Don't give up what you believe in and stand for.  

Know when to quit.

• Know when to walk away from a loss.  If the business is a failing business, leave emotional ties behind.  The ability to think clearly and knowing when to cut your losses is crucial to being successful.

Assess the risks.

• Crucial to Berkshire Hathaway's business, Warren has to constantly evaluate possible risks when owning companies.  Evaluate all possible scenarios so there will be no surprises.

Know what success really means. 

• Buffett doesn't measure success in dollars surprisingly.  He lives an extremely humble live and doesn't own many lavish things.  This is how Warren measures success "When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life." 

The Secret to Happiness is No Secret

See The 'secret' to happiness... is no secret at The Financial Philosopher.

The blog post gives some great advice on finding happiness from the following quotes:

• "Health is the greatest possession. Contentment is the greatest treasure. Confidence is the greatest friend. Non-being is the greatest joy." ~ Lau-tzu

• "All truly wise thoughts have been thought already thousands of times; but to make them truly ours, we must think them over again honestly, till they take root in our personal experience." ~ Johann Wolfgang von Goethe

• "My opinion is that you never find happiness until you stop looking for it." ~ Chuang Tzu

• "If thou wilt make a man happy, add not unto his riches but take away from his desires." ~ Epicurus

• "Don't aim at success. The more you aim at it and make it a target, the more you will miss it. For success, like happiness, can not be pursued; and it only does so as the unintended side-effect of one's dedication to a cause greater than oneself or as the by-product of one's surrender to a person other than oneself. Happiness must happen and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see -- in the long run, I say! -- success will follow you precisely because you had forgotten to think of it." ~ Viktor Frankl

Best Advice I Ever Got: Thomas S. Murphy

Thomas S. Murphy, Former CEO of Capital Cities/ABC

Always do the right thing and you will have nothing to worry about:
I got two pieces of advice I have always remembered. The first was from my father, Charles E. Murphy, who was a justice of the New York State Supreme Court. It was a point about ethics. He said, "Doing the wrong thing is not worth the loss of one night's good sleep."

Some things in life cannot be controlled. Spend your time on things you can control:
The other came from Benjamin Selekman, a Harvard Business School professor who taught labor relations. The last thing he said, at his last lecture to my class, was, "Here is something to remember for the rest of your life: Don't spend your time on things you can't control. Instead, spend your time thinking about what you can."

Source: Best Advice I Ever Got

The Fear of Failure

"After a lifetime of making money and observing better men and women than I fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth. Trust me on this. If you shy away for any reason whatever, then the way is blocked. The gate is shut -- and will remain shut." - Felix Dennis

This is a great quote on how to get rich. Motivation for wealth stems from fear - the fear of failing in the eyes of the world. The eyes of the world could be composed of your family, friends, work associates, people you will meet someday, etc. Until you take the chance to fail, you will never fail, nor will you complete your goal. The goal discussed here is wealth but can be utilized to many other aspects of life (finishing college, being a good parent, getting a certain job, taking care of your family, traveling the world, etc.).

Take a chance at something... anything. If you fail, find out why you failed. Maybe you failed because the idea just wouldn't work, maybe you failed because of lack of effort, branding, knowledge, resources. Whatever the case, fix it or move on to something else you might fail at. Those who succeeded at something always failed along the way.

Advice from Arnold Schwarzenegger

Arnold gives advice to the contestants of the TV Show, "The Apprentice".

Here are a few quotes from the video:

• "Never listen to -- it can't be done"
• "Pain is temporary, the result may be permanent"
  
• "The more you succeed, the more people will attack you"

Top 20 Quotes for Success

Here are some great quotes on success:

1. "The secret to success is deferred gratification." - Me
2. "Don't waste life in doubts and fears; spend yourself on the work before you, well assured that the right performance of this hour's duties will be the best preparation for the hours and ages that will follow it." - Ralph Waldo Emerson
3. "Try not to become a man of success, but rather try to become a man of value." - Albert Einstein
4. "The elevator to success is out of order. You’ll have to use the stairs…. One step at a time." - Anonymous
5. "I don't know the key to success, but the key to failure is to try to please everyone." - Bill Cosby
6. "The steps to success are simple. Decide what you want. Determine the price. Pay the price." - Burker Hunt
7. "There are two types of people who will tell you that you cannot make a difference in this world: Those who are afraid to try and those who are afraid you will succeed." - Ray Goforth
8. "The person who gets the farthest is generally the one who is willing to do and dare. The sure-thing boat never gets far from shore." – Dale Carnegie
9. "Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it, So go ahead and make mistakes. Make all you can. Because remember that’s where you will find success." – Thomas J. Watson
10. "When a man feels throbbing within him the power to do what he undertakes as well as it can possibly be done, this is happiness, this is success." - Orison Swett Marden
11. "Success: willing to do what the average person is not willing to do." - Anonymous
12. "You only have to do a very few things right in your life so long as you don't do too many things wrong." - Warren Buffett
13. "It is wise to keep in mind that neither success nor failure is ever final." - Roger Babson
14. "You and your opponent want the same thing. The only thing that matters is who works the hardest for it." - Anonymous
15. "Only put off until tomorrow what you are willing to die having left undone." - Pablo Picasso
16. "People often say that motivation doesn't last. Well, neither does bathing -- that is why we recommend it daily." - Zig Ziglar
17. "A man can succeed at almost anything for which he has unlimited enthusiasm." - Charles Schwab
18. "Success comes from constant and never ending improvement." - Tony Robbins
19. "Some people dream of success, while other wake up and work hard at it." - Anonymous
20. "Do not let what you cannot do interfere with what you can do." - John Wooden

Benjamin Franklin, Founding Father of the U.S.

Benjamin Franklin (January 17, 1706 [O.S. January 6, 1706] – April 17, 1790) was one of the Founding Fathers of the United States of America. A noted polymath, Franklin was a leading author and printer, satirist, political theorist, politician, scientist, inventor, civic activist, statesman and diplomat. As a scientist he was a major figure in the Enlightenment and the history of physics for his discoveries and theories regarding electricity. He invented the lightning rod, bifocals, the Franklin stove, a carriage odometer, and a musical instrument. He formed both the first public lending library in America and first fire department in Pennsylvania. He was an early proponent of colonial unity and as a political writer and activist he, more than anyone, invented the idea of an American nation and as a diplomat during the American Revolution, he secured the French alliance that helped to make independence possible.

Born in Boston, Massachusetts, Franklin learned printing from his older brother and became a newspaper editor, printer, and merchant in Philadelphia, becoming very wealthy, writing and publishing Poor Richard's Almanack and the Pennsylvania Gazette. Franklin was interested in science and technology, and gained international renown for his famous experiments. He played a major role in establishing the University of Pennsylvania and Franklin & Marshall College and was elected the first president of the American Philosophical Society. Franklin became a national hero in America when he spearheaded the effort to have Parliament repeal the unpopular Stamp Act. An accomplished diplomat, he was widely admired among the French as American minister to Paris and was a major figure in the development of positive Franco-American relations. From 1775 to 1776, Franklin was Postmaster General under the Continental Congress and from 1785 to 1788 was President of the Supreme Executive Council of Pennsylvania. Toward the end of his life, he became one of the most prominent abolitionists.

Franklin's colorful life and legacy of scientific and political achievement, and status as one of America's most influential Founding Fathers, has seen Franklin honored on coinage and money; warships; the names of many towns, counties, educational institutions, namesakes, and companies; and more than two centuries after his death, countless cultural references.

Source: Wikipedia.org

Benjamin Franklin has offered a lot a great advice on many differing topics over his lifetime and can be learned from. Below are excerpts from Money Advice from Benjamin Franklin, the website details 78 pieces of gathered advice from this very successful man. The top 10 in each section are listed below.

Motivation and Utility:

1. Early to bed, and early to rise, makes a man healthy, wealthy and wise
2. Diligence is the mother of good luck
3. God helps them that help themselves
4. Sloth, like rust, consumes faster than labor wears, while the used key is always bright
5. Dost thou love life, then do not squander time, for that’s the stuff life is made of
6. Lost time is never found again
7. He that riseth late, must trot all day, and shall scarce overtake his business at night
8. Drive thy business, let not that drive thee
9. Industry need not wish
10. He that lives upon hope will die fasting

Lessons learned from his words:

• Do your research
• Staying busy will tire you less than simply sitting around
• Do not waste time, every second is precious and cannot be taken back
  
• If you start sometime late, you must work harder than the next guy to win
  
• Be in control your life, don't let your life control you

Edward Lampert, American Investor

Edward S. "Eddie" Lampert (born July 19, 1962) is an American investor, financier and businessman.

He is the chairman of Sears Holdings Corporation(SHLD) and founder, chairman, and CEO of ESL Investments. Until May, 2007 he was a director of AutoNation, Inc. He previously served as a director of AutoZone, Inc. from 1999 to 2006.

Lampert graduated from Yale University in 1984 (B.A., economics, summa cum laude), where he was a member of Skull and Bones and Phi Beta Kappa. He was an intern at Goldman Sachs in July 1984, and worked in the firm's risk arbitrage department from March 1985 to February 1988. He worked directly with Robert Rubin; when Lampert decided to go out on his own, Rubin warned it was a bad career decision.

He left the bank to form ESL Investments, based in Greenwich, Connecticut, in April 1988. The name ESL derives from Lampert's initials. Richard Rainwater, whom he had met on Nantucket Island, gave him $28 million in seed money and introduced him to clients, such as Geffen. In 2003, he was kidnapped from the parking lot of his office, but Lampert convinced his captors to let him go after two days.

Lampert's investment style can best be described as "concentrated value", often focusing on the retail sector. He has produced annual returns of 30% since forming his fund. Lampert typically holds his investments for several years and usually has between three and fifteen stocks. His investment style has drawn comparisons to the financier Warren Buffett. He has, in large part, been credited for forming and merging Kmart and Sears into Sears Holdings.

His earnings in 2004 were estimated to be $1.02 billion USD, making Lampert the first Wall Street financial manager to exceed an income of $1 billion in a single year. In 2006, Lampert was the richest person in Connecticut with a net worth of $3.8 billion. As of 2007, he retained that rank, with a net worth totaling $4.5 billion.

Source: Wikipedia.org

Achieve your full potential, even if people question you:
“Like Eli Manning, we know what it’s like to be underestimated and questioned, but we intend to keep working on our game to achieve our full potential,” - Eddie Lampert

Alan Greenspan, American Economist

Alan Greenspan (born March 6, 1926 in New York City) is an American economist and from 1987 to 2006 chairman of the Board of Governors of the Federal Reserve of the United States. He currently works as a private advisor, making speeches and providing consulting for firms through his company, Greenspan Associates LLC.

First appointed Fed chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring after a record-setting tenure on January 31, 2006, at which time he relinquished the chairmanship to Ben Bernanke. Greenspan was lauded for his handling of the Black Monday stock market crash that occurred very shortly after he first became chairman, as well as for his stewardship of the Internet-driven, "dot-com" economic boom of the 1990s. This expansion culminated in a stock market bubble burst in March 2000 followed by a recession beginning in late 2000 and continuing through 2002.

From 2001 until his retirement from the Fed, he was increasingly criticized for some statements seen as overstepping the Fed's traditional purview of monetary policy, and viewed by others as overly supportive of the policies of President George W. Bush, as well as for policies seen by Business Week Magazine and others as leading to a housing bubble. During his tenure Greenspan was considered to be the leading authority on American domestic economic and monetary policy, and his active influence continues to this day.

Quotes:
Success Quotes

I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well.

• Use honesty and help others to get better and in the end you all will be happier. I wonder how some people sleep at night when they consciously take advantage of others through dishonesty and other practices.

To succeed, you will soon learn, as I did, the importance of a solid foundation in the basics of education--literacy, both verbal and numerical, and communication skills.

• Build from the ground up. You have to start somewhere and you mind as well start now. Study hard and better your communication skills.

The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.

• Be proud of what you have accomplished. Look back at what you have done but don't forget to also look into the future. Reflect on all of the challenges you have overcome and remember that you made it without hurting others.

Quotes from Mario Andretti

"Desire is the key to motivation, but it's the determination and commitment to an unrelenting pursuit of your goal - a commitment to excellence - that will enable you to attain the success you seek." Mario Andretti

Mario Gabriele Andretti (born February 28, 1940 in Montona d'Istria, Italy, now Motovun, Croatia) is an Italian American racecar driver, and one of the most successful Americans in the history of auto racing.

He has competed and won in many different types of auto racing, including stock cars, midget cars, sprint cars, IndyCars, drag racing cars, sports cars, and Formula One cars. During his career, Andretti won four IndyCar titles, the 1978 Formula One World Championship, and IROC VI (the 1978 - 1979 IROC). To date, he remains the only driver ever to win the Indianapolis 500 (1969), the Daytona 500 (1967), and the Formula One World Championship, and, along with Juan Pablo Montoya, the only driver to have won a race in the NASCAR Sprint Cup Series, Formula One, and an Indianapolis 500. No American has won a Formula One race since Andretti at the 1978 Dutch Grand Prix. Andretti had 109 career wins on major circuits.

Andretti had a long career in racing. He was the only person to be named United States Driver of the Year in three decades (1967, 1978, and 1984). He was also one of only three drivers to win races on road courses, paved ovals, and dirt tracks in one season, a feat that he accomplished four times. At his final IndyCar win in April 1993, Andretti became the first driver to win IndyCar races in four decades and the first to win races in five decades.

Source: Wikipedia.org

Quotes from Steven Covey

“Motivation is a fire from within. If someone else tries to light that fire under you, chances are it will burn very briefly.” - Steven Covey

Truly Believe in Something:
Think about starting something on your own versus following someone else's idea. You are more inclined to be motivated about something you truly believe in, rather than someone telling you how great it's going to be. Until you really believe in your idea or someone else's idea, you will have a difficult time finding motivation in it.