Warren Buffett is one of the richest men on the planet and in the investment world he is seen as one of the best investors of all time. His decisions have made him billions many times over.
However what is his secret? What does he do that gives him that mental edge?
It’s actually quite simple. He reads a lot!
One time he was asked what the secret to success is. This is his reply:
“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.“
That’s it. This is what gives him the combinatorial mental powers that he has. The more he reads, the more information he has, the more things he can combine.
It also makes him less impulsive and more rational. To quote him again:
“I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.“
His investment partner, Charlie Munger, also reads a lot. From all the information he reads, he creates a select amount of mental models, which he then uses to guide him when making investment decisions, as well as many other decisions in life.
For him, reading a lot (and a variety of books) is fundamental:
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.“
If you look at many of the successful people of today, the expert-generalists that have created the iconic enterprises of the past decades, they share this exact same trait with Buffett and Munger. They read a lot.
When he was young and beginning his investing career, Buffett would read between 600 and 1000 pages a day! He still spends about 80% of his day reading.
I already mentioned that Elon Musk also reads like 2 books a day. Bill Gates reads 50 books a year. In the old days, guys like Thomas Jefferson or Benjamin Franklin would also spend their days reading a variety of books.
As Benjamin Franklin said:
“An investment in knowledge always pays the best interest.“
The elite thinkers spend much of their time sucking up as much knowledge as they can.
What does the average person do? This:
There is a book by Tom Corley called “Rich Habits: The Daily Success Habits of Rich Individuals”, where the author mentions some very interesting findings.
There was a study done that surveyed the reading habits of different people. The results were quite telling.
Rich people (those with an annual income of over 160 000 Dollars) read primarily for self-improvement. Poor people (annual income of 35 000 Dollars or less) read for entertainment.
To quote him:
“The rich are voracious readers on how to improve themselves. They’re reading self-improvement books, biographies, books about successful people, things like that.“
You see what I am getting at? If you want to be successful, you need to start reading a lot. You might not become a multi-billionaire like Warren Buffett, but you will definitely have a leg up on the average dude on the street.