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The Remarkable Early Years of Warren Buffett

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For most people, the “Oracle of Omaha” needs no introduction. With a self-made net worth of $84 billion, some experts consider the 87-year-old to be the greatest investor of all-time.

Despite his incredible achievements and decades in the public eye, the modest Midwesterner is frugal, relatable, and full of humility – and his life story is an endless source of lessons to aspiring business professionals around the world.

The Warren Buffett Series

Part 1: The Early Years

Today’s infographic, which is done in partnership with finder.com, is Part 1 of the Warren Buffett Series, a five-part biographical series about the legendary investor.

The Warren Buffet Series: The Early YearsInside Warren Buffett's BrainPart 3Warren Buffett's Biggest Wins and FailsBest Buffett Quotes

The Warren Buffett Series: The Early Years
Note: Stay tuned for future parts with our free mailing list.

The young Warren Buffett was clearly a special kid. He ran his first “business” when he was five years old, and he invested in his first stock when he was 11. Buffett even managed to emerge from high school richer than his teachers.

But what lessons can we learn from Buffett’s prolific childhood – and how did his experiences as a young man shape him into the magnate we know today?

From Numbers to Dollar Signs

Even for someone as gifted and focused as Buffett, a serendipitous insight played a crucial role in charting his future course.

During a visit to the New York Stock Exchange when he was 10 years old, the sight of a young man rolling custom, handmade cigars on the floor made an outsized impact on him. In particular, Buffett realized that such a job couldn’t exist without massive amounts of money flowing through the stock market.

This unexpected epiphany planted the seed for stocks in his brain, and Warren’s long fascination with numbers soon shifted towards dollars.

The Buffett Growth Mindset

Warren Buffett famously spends 80% of his day reading – and the written word was just as important to his younger self. As a lad, one book that caught Buffett’s eye was One Thousand Ways to Make $1,000 by F.C. Minaker

Specifically, the book showed Buffett how $1,000 could compound over time – and that the earlier you had money working for you, the better.

An important lesson from the book? There’s a massive difference in returns between 60 and 70 year compound interest scenarios. In other words, annualized returns are just one part of the equation – but how long the money compounds is the other crucial part. This is a big part of the reason why Warren Buffett got started early.

Warren Buffett’s First Stock

Through his various activities, Buffett had $120 saved by age 11. Naturally, he invested it in a stock, co-investing his sister’s money. They each bought three shares of Cities Service Preferred for $38.25 each.

The share price promptly dropped to $27, but Buffett waited it out. When it got to $40, he sold to net a small profit – however, the stock soon after went all the way to $202!

Warren calls this one of the most important moments in his life, and he learned three lessons:

  1. Don’t overly fixate on what he paid for the stock
  2. Don’t rush unthinkingly to grab a small profit. He could have made $492 if he was more patient
  3. He didn’t want to have responsibility for anyone else’s money unless he was sure he could succeed

These important lessons would eventually tie in well to his value investing philosophy.

Odd Jobs

The young Buffett wasn’t afraid to try new things to build up his capital. He collected golf balls, sold peanuts and popcorn, sold gum and Coca-Cola, and even created tipsheets for horse races on a typewriter.

Some of his stranger endeavors? He launched Buffett’s Approval Service and sold stamps to collectors around the country, and he also launched Buffett’s Showroom Shine – a car shining business that didn’t last too long.

Warren’s Work Ethic

By the end of high school, Buffett had launched multiple businesses, sold thousands of golf balls, read at least 100 books on business, and hawked 600,000 newspapers.

This hard work led to him having a fortune of $5,000 by high school graduation time, the equivalent of $55,000 in today’s currency. He even owned land at this point, after buying 40 acres of Nebraska farmland with his newspaper profits.

Knocked Off Course

After high school, Buffett decided he was a shoe-in for Harvard. He knew it would be stimulating for him intellectually, and that the famed business school would allow him to develop a strong network.

The only problem? He got rejected.

Instead of letting this get to him, he discovered Benjamin Graham’s book The Intelligent Investor and fell in love. It was the methodical investing framework he needed, and he would later call it the “best book about investing ever written”.

Buffett would soon be accepted at Columbia Business School, where Benjamin Graham and David Dodd taught finance. Graham became Buffett’s idol, and his second-biggest influence behind his own father.

Other Notes

Part 2 of the Warren Buffett Series will be released in early January 2018.

Credits: This infographic would not be possible without the great biographies done by Roger Lowenstein (Buffett: The Making of an American Capitalist) and Alice Schroeder (The Snowball), as well as numerous other sources cataloging Buffett’s life online.

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Entrepreneurship

Navigating Uncertainty: Leadership Accountability in Times of Crisis

This infographic explores five key behaviors that CEOs and executives should adopt in order to demonstrate leadership accountability in times of crisis.

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In the face of adversity, leaders may struggle to manage their teams effectively.

Before the COVID-19 outbreak, over half of all professionals globally worked remotely at least 2.5 days a week. This has since increased dramatically, with 88% of organizations now insisting their employees work from home and implement social distancing.

Leaders must adapt to a more flexible workplace and create a culture of accountability so that their organization can successfully weather the COVID-19 storm.

Leadership Accountability in Uncertain Times

Today’s infographic, from bestselling author Vince Molinaro, reveals the five behaviors that leaders can adopt in order to provide thoughtful navigation through uncertainty.

leadership accountability in times of crisis

>> Join Vince Molinaro’s Community of Accountable Leaders

The Impact of Leadership Accountability

As the workforce pivots to remote working arrangements, the benefits of flexible working policies are coming into sharper focus.

Research shows that these policies can lower overhead costs, reduce commuting times and increase employee satisfaction—in addition to attracting top talent. Moreover, the shift to working remotely could boost the U.S. economy by $4.5 trillion annually by 2030.

But achieving these benefits requires accountability from everyone in an organization, and in an increasingly virtual world, that can become difficult to manage.

Challenges Facing Leaders Today

Leaders are already subject to an array of challenges that they must overcome, such as:

  • The pressure to differentiate: Leaders feel an unrelenting pressure to innovate and help their organizations stand out in a sea of ruthless competitors.
  • Executing the strategy: Leaders must align the organization to ensure employees are clear about what needs to get done to execute priorities seamlessly.
  • Leading transformational change: With so many moving parts, constant change across several aspects of a business can be difficult for leaders to manage.
  • Creating enduring value: Customers, boards, and shareholders have high expectations for leaders in exchange for their loyalty.
  • Building future talent: Leaders must build and nurture the next generation of leaders in addition to managing the day-to-day.

These mounting pressures can have a detrimental impact on a business leader’s performance, so it is crucial that they get the support they need now, more than ever.

The Characteristics of Accountable Leaders

Truly accountable leadership is the only way an organization can weather uncertainty in a world that has been upended. Research reveals that among the strongest performing companies, accountable leaders consistently demonstrate five behaviors that set them apart from others.

  1. Hold others accountable for high standards of performance
    Good leaders make mutual expectations clear by consistently reinforcing what is important, and what employees should prioritize in their roles.
  2. Tackle tough issues and make difficult decisions
    Technology is hugely beneficial, but it should never replace the human element. Picking up the phone or having a Skype call is more immediate and personal, especially when it comes to problem solving and making tough decisions.
  3. Communicate the strategy across the organization
    Leaders must ensure that employees have complete clarity in terms of the company’s vision to do their jobs effectively. Creating a set of well-defined goals can help people stay engaged and decrease their stress levels.
  4. Express optimism about the company and its future
    Many employees can feel isolated and disconnected in the virtual world, so leaders must provide support, positive energy, and a sense of hope for the future.
  5. Display clarity about external trends in the business environment
    Finally, it is critical to help employees make sense of the current situation right now. Leaders must provide honest and transparent communication in a way that manages fear, stress, and anxiety. This encourages employees’s determination to help the organization succeed.

Leading The Future

As we embrace the unknown, it is clear that leadership accountability will become more important than ever.

In fact, it has become a crucial element for future-proofing organizations in times of crisis or drastic change. Perhaps more importantly, it is necessary for encouraging teams to emerge more connected and resilient than ever before.

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Entrepreneurship

How Leadership Accountability Drives Company Performance

What impact does leadership accountability have on the performance of an organization? As it turns out, a lot.

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Leadership accountability

Leadership plays a big role in determining the success of an organization.

Effective and accountable leadership can help propel a company forward. On the flip side, a failure to live up to the expectations of leadership can have cascading and lingering effects across an entire organization.

Bridging the Leadership Accountability Gap

Today’s infographic, from bestselling author Vince Molinaro, is a revealing look at the impact that leadership accountability can have on an organization.

Leadership Accountability

Pre-order Vince Molinaro’s new book, Accountable Leaders

The Value of Leadership Accountability

The majority of people within organizations understand the value of leadership accountability – yet, in practice, many leaders fail to deliver on that promise.

A global survey of over 2,000 HR leaders and senior executives revealed that a mere 27% believed they had a strong leadership culture. Two-thirds of those surveyed believed that leadership accountability is a critical issue within their organization, while only one-third are satisfied with the degree of leadership accountability demonstrated at in their workplace.

What impact does this leadership accountability gap have on the performance of a company? As it turns out, a lot.

The Critical Link Between Accountability and Performance

Once survey responses were organized into three distinct categories – low performers, average performers, and industry leaders – interesting trends began to emerge.

Companies in the “industry leaders” category were far more likely to have a culture of leadership accountability. In fact, industry leaders were twice as likely to have clearly established expectations for their leadership team than respondents in the average or lower performing categories. These high performing companies were also far more likely to:

  • Have formal succession programs to help identify high-potential leaders
  • Have practices in place to foster more diverse leadership teams
  • Implement development programs to effectively build the capacity of leaders

Industry leading companies had leadership teams that ranked higher in a number of key areas. Leaders at high performing companies were far more likely to:

  • Understand customer needs and desires
  • Understand external trends affecting the business
  • Demonstrate a high level of emotional maturity
  • Demonstrate passion for executing on the company’s vision

In many of these areas, the gap between industry leaders and the other categories is significant, which presents a compelling case for embracing leadership accountability as a core value.

Building a Strong Leadership Culture: Questions to Ask

The first step to building a culture of leadership accountability is self reflection. Here are questions leaders can ask to help assess how their organization is doing:

  1. Is leadership accountability a critical priority in your organization?
  2. Has your organization set clear leadership expectations for leaders?
  3. Do you believe your leaders at all levels, are fully committed to their leadership roles?
  4. Have you built a strong and aligned leadership culture across your organization?
  5. Does your organization have the courage to identify and address mediocre leadership at an individual and team level?

Answering “no” to any of the questions above means there’s an opportunity to develop a more accountable and effective leadership team.

Only three things happen naturally in organizations. Friction, confusion and underperformance. Everything else requires leadership.

– Peter Drucker

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