Follow Me

I was discussing Buffett with a friend the other day and regaling the mountains of analysts who detail how we should interpret Buffett's words of wisdom. After all, be like Warren and you will be rich! 

Like many fields of endeavor, the belief is that if you mimic the successful, you too will be successful.  

One consistent theme of wealth management is the belief that you can copycat the wealthy because they know what they are doing. I can tell you there is a reason why banks have a private High Net Wealth Client section because they aim to manage the money of the wealthy. I doubt Bill Gates is sitting around checking stock prices and actively buying stocks.  

The assumption is that they all got rich the same way - hard work, thrift, entrepreneurship, and of course the morning routine of ice bath, black coffee and meditation. 

Ah the morning routine........ Experts often narrow their fields of expertise and find it difficult to deal with the specific. Contingency is not their strong suit. If you wanted to be like Buffett, who is still going at 93, then you would basically ignore all expert dietary advice, eat steak, drink tonnes of Coke and you live to a ripe old age! But of course, any dietician or food experts would not recommend steak and coke as the way to healthy living. 

So which part of Buffett's rise do we use?

Gates and Buffett and many others got rich by different means and while you can talk about the common threads, a deeper drive reveals so much contingency, there are few lessons which you can draw upon. There are just too many specific events that happened at that time that may never happen again. 

What we should be paying attention to is the variation, not the believed commonalities and seeing if there are principles that we can apply. Not everyone can be born at a time where American capitalism becomes ascendant or a period where computers are starting to proliferate.  

Too many people think it is simply a matter of personal applications of a set of principles (subjectively chosen I might add) used by the wealthy and away you go. 

That's not how it works.