The fact is, there are people with money that fall asleep with anxiety because of the perception/reality of an insecure future, and there are also those with very little that live in peace. Over the years, I have found that wealth is a state of mind. Successes along the way and appreciation for what you have will reinforce your ability to experience the feeling of wealth and security.
Warren Buffett, the single greatest investor of the 20th century, discusses the importance of having a financial moat. A moat is literally a deep, wide ditch surrounding a castle, fort, or town, typically filled with water and intended as a defense against attack.
Understand that when it comes to life, your finances and future will always be “under attack,” and if you don’t have a financial moat around you, you will be overtaken.
Building a financial moat around yourself involves:
- Investing in yourself
- Living below your means
- Creating passive income
- Building your financial fortress
- Creating sustainability throughout the years
Warren Buffett was actually named by Time Magazine as one of the most influential people in the world. He is now worth north of $70 billion.
He oscillates among the top 3 richest men in the world. This is a man who found his passion at an early age and navigated his way through life creating value for people along the ride. I’ve spent the last week listening to interviews of him and reading about what has made this man so successful, and I put together the top 8 tips of achieving success, with bits of his insight:
- Find your passion. Take the job/career path you would take if you were independently wealthy and pursue it. The feeling of wealth comes from accomplishments and joy in what you do, and if you are unhappy now, doing what you do and making $X, making $2X won’t change anything.
- You can’t care what others think. Leaders are few and far between. The things that make sense to leaders often seem counterintuitive to those around them. Take giving, for instance. To many, giving seems like an economic loss, but almost all successful leaders will tell you to give and that when you provide value to others around you, you are cultivating an environment that will enable you to thrive. If you need to wear old clothes or drive a cheap car to achieve your financial goals, do so, and don’t worry about what others around you think. You’re a leader, and you’re going somewhere.
- Stay in your circle of competence. Be focused in the areas you pursue. For as great of a stock investor Warren Buffett has proven to be, he openly claims that he knows nothing about technical analysis. He stuck with fundamentals and allocated capital to undervalued opportunities where he saw fit. Being exceptional in one or two areas is much more profitable than having basic knowledge across the board.
- Understand that failure is okay. If you aren’t dead, you can always come back and try again. The harshest critic — and the one who will hang your past mistakes over your head the most — is you… Let the past go, and when failure comes, be prepared to step up to bat again.
- Have a margin of safety. Don’t drive a truck that weighs 9,900 pounds on a bridge that says it has a limit of 10,000 pounds. This will bring you peace of mind when applied in your life.
- Network with people of like minds and with similar goals.
- Read, read, and read… Educate yourself, and never stop learning.
- Have a competitive advantage, and fight for it… Capitalism is all about someone coming and trying to take the castle. If you come to the market with a great television, there are going to be 10 others that come onto the scene to sell televisions that are better than yours. If you get complacent in your life, competition will overrun you.
In my own life, I’ve learned the importance of being optimistic. Pessimistic people will calculate their future into an absolute gutter. Pessimists are likely to be able to accurately assess the current situation, but optimists won’t allow current setbacks to get in the way of success. Studies have shown that optimists have a much greater chance of overcoming the situation in front of them.
No matter where you are in life and what state of mind you are currently in, if you want to advance, you need to acknowledge the resources around you and the sheer wealth of information that is available at the click of a mouse and proceed forward.