A Billion Dollar Habit

The other day, I came across an old note that I had written to myself a few years ago. I was attending the 2014 Berkshire Hathaway shareholder meetings when Warren Buffett and his partner, Charlie Munger, answer questions throughout the span of 6 to 7 hours and offer their advice on everything from investing to happiness. My note reminded me of a billion dollar habit I picked up from Warren Buffett.

Here’s how it came up: Warren and Charlie were answering a question from an analyst when Charlie inched on saying something negative about a particular individual. The analyst followed up to gain some clarity and, again, Charlie’s short quip was no doubt negative.

Without pausing for a moment, Mr. Buffett followed up and said, “Don’t condemn it too much. You and I are practicing similar habits in other areas of our lives.”

I was FLOORED. I remember I completely tuned out for the next few minutes as I thought of the impact of what was just said.

Here’s a multi-billionaire talking to another multi-billionaire about financial habits and he’s saying they have similar negative habits. He’s not suggesting that they might have negative habits, he’s saying they do.

And, if you stick with me here, this is the part that really resonated with me:

He cut the negative criticism immediately, and shifted his lens internally.

He took a brief moment to acknowledge it was negative, and then immediately honed it in on himself.

That is a VERY tiring way to think. It is much easier to condemn and leave it at that.

The common response for anyone in Warren’s shoes would have been, “Oh yea, that jerk. Did you hear he also did XYZ?” Luckily, Warren possesses an uncommon mind that demonstrated a constructive way to behave in that moment.

How I’ve Applied this Billion Dollar Habit in my Life

When I see someone acting in way that is destructive or counter to something I want to achieve, I take a moment to acknowledge what led them to make that decision.

If I’m part of the conversation I’ll even ask them, “Hey, I’m lost here, what led you to make that decision?” and — here’s the key to gaining perspective — LISTEN EMPATHICALLY to their response.

I want to know.

I’ll try to rephrase their belief to see if I understand. Typically the conversations continues, but the next chance I get, I pause for a moment of reflection.

Here’s where it all comes together; I ask myself, “Where is my similar belief that is leading me down a different path? One that is counter to where I want to go?”

Similar to Buffett’s response to Charlie, I know I have poor habits in areas of my life that I am blind to.

This process has also led me to identify and define what it is that I truly value. It also easier to recognize mistakes made by others than to spot your own. We often have blind spots that need to be pointed out to us, and even then, we might not be willing to accept them.

Within the personal finance blogging world, I find that the greatest resource we have is the ability for everyone to share their story. The high level of transparency on what works and what doesn’t work offers everyone a chance to learn.

This is why so many posts will mention the negative ramifications to ill timed financial decisions. Or, people will share their turbulent experiences in the hopes that others can apply an internal lens to improve their own situation, ultimately saving themselves a lot of grief.

Is this habit part of your mental arsenal? Do you engage in similar thought exercises? Know any other billion dollar habits?

Master Distiller

23 comments… add one
  • Jay Sep 19, 2016, 6:53 am

    This is a great article, Matt! And I commend you for picking up this habit. I do my best to be mindful and empathetic as well when someone or something strikes me as off. But as you mention, it’s not always easy and dong it consistently can be a challenge. Thanks again for the reminder and have a great week!

    • Distilled Dollar Sep 19, 2016, 11:07 am

      Thanks Jay! It is defiantly a tough habit – but it’s funny how the tough ones yield the most rewards.

  • Ms. Montana Sep 19, 2016, 8:48 am

    That is so good! Sometimes I think we just want to learn from others success instead of trying to glean things out of their weakness.

    • Distilled Dollar Sep 19, 2016, 11:07 am

      Exactly! We all have weaknesses and we can all learn to grow stronger – whether it be with spending, savings, investings, or anything really.

  • Physician on FIRE Sep 19, 2016, 8:52 am

    Sorry to hear you’re not perfect. I wish I could identify with that sentiment, but I just can’t 😉

    Cheers to DD, Warren, and Charlie for their honesty!

    • Distilled Dollar Sep 19, 2016, 11:09 am

      Haha! Ya, luckily I still have a long runway to work on my negative behaviors!

  • ESI Money Sep 19, 2016, 10:02 am

    Humility and the ability to see your own faults are two qualities that make Buffett great even beyond his investing success.

    And they also probably help him out with that too…

    • Distilled Dollar Sep 19, 2016, 11:10 am

      Well said! Warren knows where he is strong and as you mentioned, he also knows his weaknesses and places he should avoid.

  • Matt @ Optimize Your Life Sep 19, 2016, 10:22 am

    Such a great outlook! I will have to work on incorporating that into my interactions.

    I agree completely on the importance of listening empathically. I have found that empathy and genuine interest solve a lot more disagreements than hammering home your side.

    • Distilled Dollar Sep 19, 2016, 11:11 am

      Very true! I’ve seen it so many times – where people rush to a solution and damage the relationship. I find it more engaging and fulfilling with this approach, although it can take much more time and energy in the short term.

  • Sara Houser Sep 19, 2016, 12:29 pm

    Hi Matt,
    I recently did a little YouTube binge on Warren Buffet and saw many clips of him and Charlie together. Charlie’s style of response is often short, stern and no frills. Given Warren’s more colorful engaging communication style, I am sure he developed this gift as a way of managing the interviews to a more positive outcome. Not only do I respect Warren as a businessman, but I affectionately think of him as a sweet Grandfatherly type. We need more warm generous financial icons like him.
    Take care

    • Distilled Dollar Sep 19, 2016, 12:55 pm

      Agreed! They both serve as great role models and you’re right – Warren comes across as more Grandfatherly and folksy – definitely a part of his charm.

  • Tawcan Sep 19, 2016, 3:52 pm

    That’s a great habit to develop for sure. Listening emphatically is so important.

    • Distilled Dollar Sep 20, 2016, 5:13 am

      Ya – sometimes it is easier to fix something in our lives only after we discover (through emphatic listening) the same type of issue occurring for someone else.

  • Jon @ Be Net Worthy Sep 20, 2016, 4:29 am

    That is a great habit to develop Matt and nice to see billionaires with a little bit of humility too! Too often, people become successful and then feel they can do no wrong. Warren Buffet really is a great role model in many ways.

    • Distilled Dollar Sep 20, 2016, 5:17 am

      I’m glad you agree Jon! Warren and Charlie have taught me a lot – and one of my favorite things is their level of humility (Warren more so than Charlie! haha)

  • Josh Sep 20, 2016, 8:35 am

    As others have mentioned you have to really consider the fact that people do not become multi-billionaires by accident – they do so intentionally. You can have all of the analytical intelligence in the world, but if you fall victim to your own bad habits and deficiencies you won’t get very far. It’s his ability to stay grounded to reality and substance (have you seen his house??) that make him truly unique.

    Thanks for sharing!

    • Distilled Dollar Sep 21, 2016, 5:58 am

      Well said. We often attribute luck to success, but we fail to see the habits that went into making someone successful. If we see a bodybuilder walking down the street, I don’t think anyone would say he got lucky to have such a body. He obviously worked on it consistently for many years.

      Haha, funny enough, yes, I have seen his house. I know you were going for more of a rhetorical question there, but thought I’d add that in there.

  • Financial Slacker Sep 20, 2016, 9:43 am

    Another great article, Matt. Like you, I find tremendous value (and fascination) in studying the behaviors of those who are successful.

    Like all of us, I have blind spots as well. The challenge is finding people close enough to you to see the shortcomings and willing enough to point them out.

    And then you need a willingness to listen and correct your shortcomings.

    • Distilled Dollar Sep 21, 2016, 6:04 am

      That’s a great point – even when we notice the negative, it can be near impossible to eliminate it, especially if it is an old habit.

      I’m glad you liked it and thanks for taking the time to read the article and comment.

  • Finance Solver Sep 20, 2016, 11:01 pm

    I love humility. The only ones who’ve been able to say “I don’t know” when I asked (probably bad) questions were interestingly higher up in the company. It gives instant credibility to them because they know what they don’t know and aren’t afraid to admit it. Pride is the enemy of success, I’ve resisted the urge to help people if I knew that they were so prideful to the point where they think that they can do no wrong. Humility is the way to go!

    • Distilled Dollar Sep 21, 2016, 6:06 am

      Well said – admitting what we don’t know can be scary. I’ve been lucky to work in multiple environments that encourage people to speak up when they are on a different page.

  • Tom Loftus Oct 10, 2016, 12:32 pm

    Thank you for this excellent article and especially for shattering my negative expectations that led me to read it. It’s ambitious to attempt to distill down the financial decisions of a billionaire to useful tactics the rest of us “financial civilians” can apply to our lives. True to your name, you achieved this outcome. Great advice. Keep up the good work.

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