It wasn’t until I started researching frugal millionaires for my post, 19 Rich People Who Choose to Live With Less, that I first learned about Warren Buffett. It’s crazy, I know because apparently he’s been around for quite some time and has made a major impression on the financial community. Since I’m pretty new to this whole finances thing, I guess it makes sense that I wasn’t familiar with him. Now I know that he made his first investment at the age of 11, he is a self-made billionaire and he still buys breakfast from McDonald’s with exact change. Usually around $3. So, when I opened my newest book,Grit: The Power of Passion and Perseverance
, I sat up and paid attention when the author, Angela Duckworth, started talking about billionaire Warren Buffet’s three steps to success. Surprisingly, his plan was very simple and only requires a single sheet of paper to get started. So, what do you need to do to start charting out your success Warren Buffet style?
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Simplify Your Budget
One of the thing’s Warren Buffett is most famously known for is his simple plan for wealth-building success. Even knowing this, I am someone who over-complicated my money for years! If you are stuck in a similar situation, I have put together a Minimalist Budget + Debt Payoff Playbook that is designed to help you simplify your money and build wealth in a way that works for you.
According to the book Grit, Warren Buffett turns to his private pilot and tells him that he hopes he has goals bigger than just driving Buffet around. The pilot admits that, yes, he does have bigger dreams for himself. That’s when Warren Buffet dropped a truth bomb. In order to help his pilot reach for the sky (pun intended) Buffet laid out his 3 step plan to success.
Before you get started, take a few moments to daydream a little bit about what you want from your life. What goals and dreams do you have for your career, your family, and yourself? In order to make this 3 step plan successfully work for you, you will have to create separate lists based on each different area of your life. For example, laying out a plan for your career will be totally separate from the goals you lay out in your personal life. Be sure to keep that in mind and focus on each area individually. Now, let’s get started with the steps to success.
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After selecting one area of your life to focus on, it’s time to make a list of the top 25 goals you have for yourself in that area. For example, if you are focusing on career goals, your list may look a little something like this:
- Work close to home
- Travel a lot
- Get a promotion
- Write a novel
- Get extra training
If the area you are choosing to focus on is family, your goal list may look a little more like this:
- Spend more time with my kids
- Eat together as a family
- Take vacations
- Don’t bring work home
- Be home more often
Get your full list made out for whichever area you chose to focus on, and then move on to the next step.
From your list of 25 goals, it’s time to select the top 5 most important. This may take some time and some serious soul searching. After all, creating a final plan for your life isn’t something that can be taken lightly. Don’t stress too much about this elimination process.
You may really feel that some of your eliminated 20 goals are valuable and shouldn’t be crossed off if that’s the case, don’t worry, we’ll come back to them in a little bit.
From here, Warren Buffet’s advice is to totally ignore any of the other goals on your list that didn’t make the top 5.
These are things that take away your time and energy from the accomplishing the top 5. What Buffett is getting at here is that wasting your time or energy on things that are not a top priority will never help you achieve the biggest goals of your life. This is totally true and is sound advice, however, Angela Duckworth, author of Grit, noticed something with her goals. Something that may make the bottom 20 goals a little more important
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When going through her own personal list, Duckworth noticed that she not only had too many goals (more than 25) but that a lot of them actually went hand in hand and overlapped one another.
So, it’s time to go back to your list, check your “rejects” pile and ask yourself why those were goals that were important to you. Let’s look at the example I gave earlier.
- Work close to home
- Travel a lot
- Get a promotion
- Write a novel
- Get extra training
Say I wound up only choosing “travel a lot” as a top 5 goal. Are the other 4 totally obsolete? Maybe not. For example, if I worked close to home, I may be able to save additional money. Those additional savings could help pay for extra training that I need to get into a job position that allows me more travel.
In this scenario, some of my bottom 20 goals are actually helpful in allowing me to achieve my top 5. So which ones are useful? This is where you can start to come up with a plan where you break down your major goals into smaller baby-steps. Now your list might look a little something like this:
In this chart, your top goals go in the big, bright top circle. From there you can break down the steps that you will need to take to achieve that top goal. Then from there break it down even more into smaller goals that help you achieve those baby goals. Your chart may, in fact, wind up being an awful lot longer than just my small, modest chart. There are a lot of steps often involved when it comes to accomplishing one big goal. Your list may wind up looking more like this:
Get to bed at 8pm –> Wake up early –> Get to work on time –> Help boss with workload –> * Get promoted *
In fact, it can go into way more detail than that even, but I think you get the picture.
I know this all seems so simple, but that’s because it really is. Chances are, you already know what you want for your life, now getting a plan in place that helps you see how to get there is really all you need. Do this for each unique area of your life. In fact, you may continue to find even more over-lap!
In all areas of your life, never be afraid to dream, but more importantly, take the steps to make those dreams a reality.
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