Money will not change how healthy you are or how many people love you. — Warren Buffett
So let’s start off with a tough reality: it’s unlikely that any of us will be as rich as Warren Buffett. In fact, he’s so rich that one-thousandth of a percent of his wealth is still about $6.5 million.
Before I get into why Buffett is winning at life, let me answer the question that’s probably roaming in the back of your mind: How could I possibly relate to someone so wealthy?
The answer is simple. Buffett was not always the mega-billionaire he is today. In fact, he had a rather humble upbringing. Yet he always had a clear vision of his future. In his high school yearbook, Buffett described himself as a “future stockbroker.” Either the man was highly driven to accomplish his goals, or he was clairvoyant.
What many do not know is that, despite his current wealth of billions, Buffett still lives in the home he purchased for $31,500 in 1958. (That would be about $250,000 in today’s market.) While the home has reportedly undergone renovations over the years, it is still not the mega-mansion most would expect America’s second-richest person to call home. So why does someone with more money than the entire economy of Uruguay choose to live in such a modest dwelling?
When asked this very question at a recent shareholder meeting, Buffett responded, “I don’t think standard of living equates with cost of living beyond a certain point. Good housing, good health, good food, good transport. There’s a point you start getting inverse correlation between wealth and quality of life. My life couldn’t be happier. In fact, it’d be worse if I had six or eight houses. So, I have everything I need to have, and I don’t need any more because it doesn’t make a difference after a point.”
What Buffett revealed in his response to the question was much more than a guide to financial responsibility. He shared his personal philosophy about happiness, and it’s very clear it doesn’t depend on overflowing bank accounts. Instead, Buffett says the two are inversely related; more wealth actually reduces quality of life.
In Buffett’s eyes, quality of life hinges upon having good health, housing, food, and transportation. These are fairly basic needs in life, ones that most of us likely already have. But, yet, we still search for more to make us happy. Bigger houses, flashier cars, more lavish meals. We derive happiness from the ever-fleeting joys of having more. But the problem is that no matter how new and shiny and expensive our iPhone is, we still run to line up every time a new one comes out.
How do we translate Buffett’s life insights into practical steps for ourselves? Well don’t worry, I already did that for you.
- Take an inventory of your life. This is probably the most important thing we can learn from Buffett. Despite having enough money to buy whatever he wants, Buffett views objects as merely hindrances to the true joys in life. “The asset I most value, aside from health, is interesting, diverse, and long-standing friends,” he said. The absolute first step to helping bring your important life assets into perspective is to acknowledge they exist. These are the things you cannot replace by going to the store: Your family, your significant other, your friends. This also includes your inherent assets, such as your personality, humor, strength, education, and so on. Write these down on a piece of paper and hold it sacred. They are the most important assets you’ll ever own.
- Embrace the simple pleasures of life. Buffett once said that a perfect day for him would be to have a whole day of peace and quiet just to read, without interruption. Figure out the simple pleasures in your life and find every opportunity to embrace them. Maybe it’s listening to your favorite radio station in the car, watching the news with a cup of hot tea, or literally stopping to smell the roses. Whatever these moments are, cherish them. Allow yourself to be fully present in the moments as they occur.
- Stay true to your core principles and values. Buffett invests in companies in which he believes, rather than in ones that can return the most profit. Buffett has been quoted as saying “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” The essence of this statement is that standing behind principle far outweighs the alternative. Now go back to the list you wrote of your assets. What does this list reveal about your values? What principles helped you achieve some of these assets in the first place? Take the time to answer these questions for yourself. You can write them down if you wish. Once you uncover these values and principles, you’ll reveal an important part of your own identity.
By sticking to these steps, I believe we can unlock the key to a much more gratifying life. These steps may not grant us the same financial achievements as Warren Buffett, but they just may help us better appreciate our most valuable assets.
Andersen, Erika. “23 quotes from Warren Buffett on life and generosity. Forbes. December 2, 2013. http://www.forbes.com/sites/erikaandersen/2013/12/02/23-quotes-from-warren-buffett-on-life-and-generosity/
Crippen, Alex. “Warren Buffett buys this with his billions…and it makes him happy.” CNBC. November 12, 2012. http://www.cnbc.com/id/49787452
Mathews, Brendan. “Warren Buffett finally explains why being frugal leads to happiness.” The Motley Fool. June 9, 2014. http://www.fool.com/investing/general/2014/06/08/warren-buffett-finally-explains-why-being-cheap-le.aspx
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Last reviewed: By John M. Grohol, Psy.D. on 5 Aug 2014
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Milford, P. (2014). How Warren Buffett Found the Key to Happiness. Psych Central. Retrieved on October 24, 2014, from http://psychcentral.com/blog/archives/2014/08/08/how-warren-buffett-found-the-key-to-happiness/