More important than the will to win is the will to prepare.
—Charlie Munger
Self-improvement is the ultimate form of investing in oneself. It requires devoting time, money, attention, and hard effort now for a payoff later, sometimes in the far distant future. A lot of people are unwilling to make this trade-off because they crave instant gratification and desire instant results.
These short-term costs, when applied the right way along an axis of time, offer an exponential payoff when applied over a long life (figure 1.1).
FIGURE 1.1 This is compounding in action. This illustrates what I experienced in 2018, after many years of determined efforts amid repeated setbacks. Resilience is a superpower.
Source: “5 Things I Learned from Elon Musk on Life, Business, and Investing,” Safal Niveshak (blog), September 16, 2015, https://www.safalniveshak.com/elon-musk-on-life-business-investing/.
“Compound interest,” Albert Einstein reputedly said, “is the most powerful force in the universe.”
So what happens when you apply such an incredible power to knowledge building?
You become a learning machine.
One person who took Buffett’s advice, Todd Combs, now works for the legendary investor. After hearing Buffett talk, Combs started keeping track of what he read and how many pages he was reading.
Eventually finding and reading productive material became second nature, a habit. As he began his investing career, he would read even more, hitting 600, 750, even 1,000 pages a day. Combs discovered that Buffett’s formula worked, giving him more knowledge that helped him with what became his primary job—seeking the truth about potential investments.5
Reading five hundred pages a day might not be feasible for you. If, however, you can find ways to read (or to listen to an audiobook) during your day, at night, or on the weekends, you are likely to see multiple benefits.
Research published in the Journal of American Academy of Neurology has shown that people who engage in mentally stimulating activities like reading experience slower memory decline than those who do not. Reading is also linked with higher emotional intelligence, reduced stress, a wider vocabulary, and improved comprehension.
If you think of your mind as a library, three things should concern you:
1. The accuracy and relevance of the information you store.
2. Your ability to find or retrieve that information on demand.
3. Your ability to put that information to use when you need it—that is, your ability to apply it.
Having a repository of knowledge in your mind is pointless if you can’t find and apply its contents.
Here, I am reminded of what Sherlock Holmes said in The Reigate Puzzle: “It is of the highest importance in the art of detection to be able to recognize, out of a number of facts, which are incidental and which vital. Otherwise your energy and attention must be dissipated instead of being concentrated.”6
So be very careful of what you take in.
The Passionate Pursuit of Lifelong Learning
The game of life is the game of everlasting learning.
—Charlie Munger
Formal education will make you a living; self-education will make you a fortune.
—Jim Rohn
Rich people have small TVs and big libraries. Poor people have small libraries and big TVs.
—Zig Ziglar
Even after achieving such enormous success, Buffett continues to read for five to six hours every day. He often credits this good habit for much of his success in life. Reading allows him to learn the lessons of others.
What many people see as a three-hundred-page book is often the accumulation of thousands of hours and decades of work. Where else can you get the entire life’s work of someone in the space of a few hours?
The most talented people in any given field are self-educated. Contrary to some belief, it doesn’t mean grinding away without teachers. Rather, it’s about drawing from your raw material and building out of it from a large number of sources. Books. Experiences. People. Everything in life can be a teacher when you possess the right mind-set. The benefits of recognizing just a few extra learning opportunities compound over time and unlock promising possibilities in the future.
The best way to learn something is to try to do it, but the next best way to learn is from someone who has already done it. This is the importance of reading and vicarious learning.
Understanding and learning from successful people provides insights about approaching life with the right attitude, developing a sound work ethic, and improving the quality of our decisions on a continuous basis.
In Michael Eisner and Aaron Cohen’s book Working Together: Why Great Partnerships Succeed, Buffett talked about his and Munger’s fierce dedication to lifelong learning:
I don’t think any other twosome in business was better at continuous learning than we were…. And if we hadn’t been continuous learners, the record wouldn’t have been as good. And we were so extreme about it that we both spent the better part of our days reading, so we could learn more, which is not a common pattern in business…. We don’t read other people’s opinions. We want to get the facts, and then think.7
In the following excerpt from an October 2013 interview in Fortune, Buffett and Munger discuss how they were able to leap ahead of their peers and competitors:
Munger: We’ve learned how to outsmart people who are clearly smarter [than we are].
Buffett: Temperament is more important than IQ.
Munger: The other big secret is that we’re good at lifelong learning. Warren is better in his seventies and eighties, in many ways, than he was when he was younger. If you keep learning all the time, you have a wonderful advantage.8
Is there a better investment than self-improvement? Here is what Buffett has had to say on the topic:
“The best investment you can make is an investment in yourself.”
“The more you learn, the more you’ll earn.”
“Learn from your mistakes, and the mistakes of others.”9
Self-improvement is the best way to spend some of your time every day. And finding the time to read is easier than you think. One way to make this happen is to carve out an hour of each day just for yourself. If you need inspiration, consider how Munger would sell himself the best hour of each day.
In an interview for his authorized biography, The Snowball, Buffett shared this story about Munger:
Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, “Who’s my most valuable client?” And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.10
It is essential to understand the opportunity cost of this one hour. On one hand, you can indulge in getting dopamine-laced rushes from emails and social media feeds while multitasking. On the other hand, you can dedicate the time to deep work and self-improvement. An hour’s time spent acquiring in-depth knowledge about an important principle pays off in