A Meeting With Warren Buffet

“There’s popularity and then there’s power and after power, you have people who legitimately move the world”

“He isn’t trying to rich or trying to be wealthy, he is trying to be a world changer.”

“Money is not the root of all evil. Its a vehicle.”

“The rich get richer when the market crashes.”

“People are the biggest distraction in life”

“All these people who are super successful spend so much time reading and most people just don’t like fuckin reading.”

“They do all these entrepreneur classes, get your ass motivated, blah blah blah. Fuck that. What we just told you in about 2 minute is how it works.”

“As a man think and speak, so he shall become”

EPISODE INDEX:

  • Welcome Back: 1:15
  • Investing Basics – Where Do You Start?: 4:15
  • Maurice’s Meeting With Warren Buffet: 13:15
  • Making Money To Change The World: 21:15
  • The Power of Giving: 30:15
  • There Are Two Economies: 51:45
  • Warren Buffet’s Habits: 1:01:00
  • Do Your Own Research: 1:11:00
  • Bet On Constants: 1:19:00
  • Eliminating Music?: 1:22:40
  • Ask Yourself Why/Closing Remarks: 1:31:30

 

KEY TAKEAWAYS:

The DOW is comprised of the 30 largest market cap companies on the American Stock Exchange. This means that the the companies listed on the DOW are susceptible to change. The market cap is the value of the outstanding shares that a company has. For example, if LG has 100 million outstanding shares of stock available for you to purchase and those shares are worth $100 each, then their market cap would be 10 billion dollars. NASDAQ is where tech companies go public. Its not exclusively tech but it is where you go to find most technical companies. Then there is the New York Stock Exchange which is where you would go to find your typical, more conservative businesses.

If you are just getting started, first you need to get the Robinhood app so you have access to the market and are free from trading fees. Next, ignore your friends who tell you what you should invest in because they know a guy who made X on that investment. Clear out the noise and look at what you interact with. Look at things that serve a purpose that you use everyday. Start with a company that you understand and know is not going anywhere. Warren Buffet gave similar advice. He said to take great American companies, you know aren’t going away and read their annual reports.

What is a mutual fund? Mutual funds are basically a combination of 50+ stocks in a certain sector such as energy. Energy would include things such as oil, gas and power. You can invest in a mutual fund that holds the top 50 stocks in one fund. What that does is it automatically diversifies you. So it will spread your investment across these companies to protect your money. It basically balances your money out. You don’t really need to investigate or study annual reports.

Maurice was out in Omaha Nebraska playing football after his incarceration and he wound up meeting the former CEO of TD Ameritrade, who was coaching football. He invited Maurice to the golf course with him to tell his story. After they finished talking he mentioned that Bill Gates and Warren Buffet were his friends and said that he would see if Warren could meet with him. Sure enough, Warren invited Maurice to his house and they had a 5 hour meeting. Warren lives a very simple and humble life. He invests based on what he uses and what he knows people will never stop using. For example, M&M Mars and Heinz. People will always eat candy bars and people will always use condiments like ketchup. These aren’t the most sexy investments but they get consistent returns. This is a guy who legitimately started rolling over money by investing in companies who play a part in people’s daily lives. He says to imagine you have twenty investments in your lifetime. If you look at investments through this lens, it is a lot of common sense investing.

Warren Buffet gets up everyday early, does his work out, reads for four hours and works. He doesn’t have a 9-5 time frame. He just works until the work is done and keeps the same routine. He is so dialed in to what he’s doing that he doesn’t spend money on superfluous toys that people of his wealth often indulge in, such as the yachts or mansions. If you’re doing that stuff so much then you aren’t focused on your business. Warren isn’t trying to rich or trying to be wealthy, he is trying to be a world changer.

In an interview, Warren Buffet mentioned that he was going to give his kids only a fraction of his wealth because he wanted to leave them enough to do something but not so much that they do nothing. When you give young people the kind of wealth that he has, it takes away the motivation to learn and leave an impact on the world because they get the money and are immediately like ‘I’m good. I don’t need to do anything more.’ In this interview he said he would leave each child half a million dollars of his 70 billion dollar fortune. Most of his fortune will be given to charity and those less fortunate. When you have that kind of money you can make a true impact on the world. If you can understand this game of investing, you are truly able to have your money work for you and accumulate wealth that will enable you to influence serious change in the world. At some point you know the business is working and that you aren’t going to starve. Once you begin to start doing things with your money that influence others and help foundations, you find true value in what you are pushing for. The goals become far more selfless. People think its about the Bentleys and Rolls Royce, getting the fancy watch and living this lavish lifestyle but when it comes down to it the greatest reward and what playing this game is truly all about is impacting the world. Leaving a positive mark on other people.

You are responsible to be as successful as possible, to put yourself in a position to give and to be the change. You can’t wait and rely on the government. The government’s job is not to change lives. The government’s job is to create the conditions necessary for us to work in to be successful. It is upon each individual to be all they can be and remain focus and be dialed in. Once you have the basics under control, the rest is a bonus that should be shared.

There are two economies. There is the economy we commonly think of, the one that looks at unemployment rates and average wages. Then there is the second economy, this is Wall Street, the American financial investment system. When the economy went to shit in during the recession from 2008 until about 2011 and Americans were losing homes and losing jobs, look at what happened to the corporations and those involved in Wall Street. Their value was skyrocketing. How does this happen you ask? Well, if the market is going up its because corporations are reporting great profits. So during this time when 99% of people were struggling, this demonstrated that the companies who were reporting such great numbers were not letting their employees share in the bounty of these profits. They were instead taking it and spreading it amongst the shareholders. The employees are making the same 40K annually that they were making in 2003 when the company was worth 3 Billion even though it is now worth 28 billion. There is no law saying that the employees need to get a raise based on profits of the company but the value of the company’s shares keep rising. Giving the profits to those who are holding those shares. Companies and investors are making the money on this gap. During the recession, the money didn’t just vanish. It got transferred.

Another thing is when the stock price plummets, you only actually lose the money if you sell. If you leave the money in the investment you have an unrealized loss because it still has the potential to go back up. Taking your money out as soon as a stock price starts falling is like quitting at the first sign of adversity when building a business. If you did, you would never have a business. That is not to say that having agility is a bad thing. If you can see why the market is crashing, then it may be advisable to pull your money but if the market is just being the market and going up and down, then why cash out early? The rich get richer when the market crashes.

Warren’s office has no computer and a TV from the seventies. It is riddled with books however. He does not accept more than 7 phone calls per day because people are the biggest distraction in life. If you are truly focused on what you want to do and what you want to become then the majority of your time and energy should be spent becoming that thing. The two things Warren suggests are to wake up early and make reading a habit. He would not be the man he is without all the reading he has done. In addition, with regard to investing you cannot invest successfully without understanding culture. The biggest takeaway is his humility. He is an incredibly humble person who lives a very simple life. He lives this simple life because the amount of things that he has to do or focus on take so much of his energy that he needn’t bother with the extravagances of the ultra wealthy. All these material things take energy from what you should be focusing on.  It is these core principles that make him so successful. He has done a great job at understanding how America operates. His investing mimics who he is. He has a simple strategy and sticks to it. He does not waver.

Successful ventures and investments don’t come directly from something you read or consumed from an external source. You take the information you have and process it through your own filtering system. This is where you can make your money. Everyone on MSNBC has their own agenda and their agenda sure as hell isn’t what is in your best interest.

Look around you. Look at everything that you and those around you are using daily. That is what you should invest in. If you believe that something is common and will not be going anywhere, do your research and put your money there. This where you put your first couple hundred dollars.

Think about the music you are listening to. Think about how the lyrics work on your subconscious. If your goal is to be in tune with yourself and only send out positivity into the world and into your mind, then why would you be listening to aggressive music about fucking shit up? The lyrics play a role on your subconscious so whether you want to eliminate music like Maurice did or not, you should be more conscious of the energy you are exposing yourself to because it plays a greater role than you realize. “As a man think and speak, so he shall become.” It is all about conditioning yourself to think, act, speak and do more for the betterment of yourself and others. If you look at any sort of personal development it is all about affirmation and the messages you tell yourself. Think about what your mental diet is like. Be intentional with what you read and what you listen to. Ensure that what you are consuming is serving a purpose.

People do things and go through life in a certain manner. If you ask yourself why, the more often you ask yourself why, the better an understanding you are going to have of yourself. “Why?” never ends because everyday brings a new challenge, brings new people and brings new circumstances. If you constantly ask yourself this question you will continually gain a better understanding of yourself.

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