Warren Buffett is the most successful investor in the world.
Not only has he posted record high returns, Buffet has also managed this over a time period
of over 60 years. It’s a testament to Buffett’s ability
to think long term. But Buffett doesn’t just spend his time thinking about securities
either. He spends a great deal of time thinking about how we can live better. We see this
in an anecdote from one of Buffett’s employees. The story goes that Buffett one day approaches
his pilot, Mike Flint, after realising that Flint had worked for him for the past 10 years.
He wants to discuss Flint’s career goals and how he can help him achieve them.
“The fact that you’re still working for me”, Buffett jokes, “tells me I’m not
doing my job.” To map out his goals, Flint was asked by his
employer to conduct a simple exercise. It would change the way he viewed his priorities
forever. The first step in this exercise was to list
down 25 things that Flint wanted to accomplish in the foreseeable future. Nothing was off
the table. Secondly, Flint was to rank these items in
order of importance and circle the top five. Prioritising his goals was more undoubtedly
challenging than listing them, but Flint managed it.
Just when it appears as though the most challenging part of the exercise was over, Buffett asks
Flint a seemingly simple question: “what are you going to do with the remaining 20
items?” “Well the top five are my primary focus
but the other twenty come in at a close second”, Flint explained. He goes on, “They are still
important so I’ll work on those intermittently as I see fit as I’m getting through my top
five. They are not as urgent but I still plan to give them dedicated effort.”
At this point, Buffett’s expression changes a little. He responds sternly:
“No. You’ve got it wrong. Everything you didn’t circle just became your Avoid-At-All-Cost
list. No matter what, these things get no attention from you until you’ve succeeded
with your top 5.” Avoid at all cost?
Flint certainly wasn’t expecting that. There’s more competition for our attention
than ever. Choices have never been more abundant than
at any other time in history and it’s unlikely we’ll be constrained anytime soon. In fact,
our options are likely only going to expand as we advance further into our careers.
It’s the primary reason why most of us will never reach the level of competency needed
to reap the rewards of being a superstar. Each time we pursue a new course of action,
we incur an opportunity cost. It takes our time and attention away from the things that
are most important to us. Your odds of success improve when you direct
your focus into a singular pursuit. You have to double down on a few things and rack up
the hours trying to get really good at that. It’s what Cal Newport calls the craftsman
mindset in So Good They Can’t Ignore You. Craftsmen often start off as apprentices to
a master and spend years learning the basics. They then become journeymen, where they add
their own style and tastes to create work with little nuances. That’s when they finally
attain mastery. They don’t get distracted by the latest
fad or jump from one interest to another. Spending time on a singular focus helps them
get the important things done. Buffett spoke about the 5/25 rule in relation
to career goals, but I think it extends far beyond that. We can attain the same results
if we apply it to our health, relationships, and personal goals.
The corollary seems to be that we’re forced to lead boring lives without options, but
that’s not true. The 5/25 rule’s only requirement is that you finish the top five
items before moving on to item #6 and beyond. Think about all the things you have wanted
to do. You might want to master another language.
Play a musical instrument. Start your own business. Practise a new martial art. Travel
around the world. But for most of us, we never really make any
progress. It’s a sign that these items on the list
aren’t really important to us. Most of us pick these items because they provide some
form of benefit. And while they are nice, they don’t sufficiently motivate us to follow
through. For example, it’s cool to be able to speak
10 different languages, but spending your weekends learning the rules of grammar is
not very exciting. Because it’s not too high on the list of our priorities — work
and family are more important than being a polyglot — we do this only in our spare
time. That effectively means a single goal can take months, if not years, to ever accomplish.
The result is that we have a list of items that will almost never get completed. This
list only weighs on our mind, and fills us with stress, guilt and overwhelm.
It’s a result of the “any benefit” mindset. Pareto’s principle — better known
as the 80/20 rule — tells us that the majority of outcomes are driven by a small
number of things that we do. Chances are that anything that falls outside your top five
will have little impact on your life. Rather than add on, take the time to eliminate.
The 5/25 rule is yet another example of how simplicity makes life better and easier.
Time and attention are two of the most finite resources in the world.
There will be more good opportunities than we realistically have time for. We shouldn’t
be quick to pounce on every one of them, because not all will be right for us. It doesn’t
matter how good an opportunity is if all it does is advance goal #25 for us.
If we force ourselves to eliminate our options, we quickly find that only a few things truly
matter to us. We would be best served if we ignore distractions and do more of what really
matters.