When I tell people that Warren Bu ett follows the 5-Hour Rule and
spends 80% of his time reading and thinking, they have an immediate
and predictable reaction: “Well, he can do that because he’s Warren
Bu ett, one of the richest people in the world. I could never do that.”
While this response may help people feel better about themselves,
it certainly won’t make them smarter.
Because the reality is: Bu ett has spent most of his time reading and
thinking since he was in grade school. Having more money or
managing a large company doesn’t magically give you free time.
Having free time is never the default. People don’t just fall into huge
blocks of free time unless they retire. Rather, free time is the result of
strategy. It’s the result of looking at time di erently.
Curious about Bu ett’s unique strategies, I’ve read several books about
him, read most of his annual letters to stockholders, and watched
nearly all of his interviews.
Below are the top six strategies Warren Bu ett has used throughout his
career in order to have lots of reading and thinking time. I invite you to
copy them so you can have more time to do what’s most important to
you everyday.
As you read these strategies, be aware that these aren’t just random
strategies that are thrown together like the typical listicle you see
online. There’s a deeper pattern that most people miss — his #1 mental
model.
1. First, Bu ett had Flint write down his top 25 goals on a piece
of paper. Go ahead and write your goals down now.
3. Finally, he had Flint take the 20 goals he did NOT circle and
put them on an “avoid-at-all-cost” list. This is the step where
you see Bu ett’s true prioritization genius. At this point, most
people would simply just focus on the top 5 goals and
intermittently work on the rest of the goals. Not Bu ett though. He
advised Flint: “No matter what, these things get no attention from
you until you’ve succeeded with your top 5.”
• The real threats to our time are not obvious distractions that
we know are wrong. Rather, the real threats are the wolves in
sheep’s clothing — activities which make us feel like we’re working
hard, but that do not ultimately move the needle. Bu ett’s three-
step approach inoculates against these!
Similar to how Bu ett audits his work activities, he also audits who he
works with.
Bu ett ONLY works with CEOs he trusts, who get results, and who he
can see himself working with for decades. As a result, he does
incredibly little negotiation and due diligence before he buys a
company, and doesn’t actively manage the CEOs of the business he
owns. Furthermore, he enjoys the conversations he has with the CEOs.
Bu ett applies the same criteria to the people on his team — many of
them have been with him for decades.
What’s truly powerful and unique is to keep things simple. That takes
e ort and skill. And, that is part of Bu ett’s genius.
It’s odd to say this, but one of the world’s richest people may also be
one of its biggest minimalists when you compare the lifestyle he could
live to the one he chooses to live.
I remember when I rst heard this, I was shocked. “How can the
wealthiest investor in human history do so few deals?”
William Thorndike gives us the answer to this question in his book, The
Outsiders:
Bu ett explains his philosophy in the following clip from the Becoming
Warren Bu ett documentary:
Warren Buffett On The Circle Of Competen…
Competen…
“He has held his current top ve stock options for over twenty years on
average. This compares with an average holding period of less than one
year for the typical mutual fund. This translates into an exceptionally
low level of investment activity, characterized by Bu ett as “inactivity
bordering on sloth.”
(I wrote more about how Bu ett focuses on a few big bets in this
article.)
And these aren’t random strategies… They are all derived from a
critical mental model — the 80/20 Rule — the fact that 20% of e orts
cause 80% of the results across many areas of our life. In each domain
of his life — relationships, investments, technologies, priorities — Bu ett
is a master at ruthlessly prioritizing the few things that matter and
cutting out everything else.
So, now the question is: how do you actually consistently and
masterfully apply the 80/20 Rule to your life.
So, here is the adapted 13-step process I use so you can prioritize your
schedule with the 80/20 Rule:
5. Circle the top 20% of priorities that will give 80% of the
results. This is where you separate the wheat from the cha . It’s
where you rise above information overwhelm and get perspective
on what really matters and can move the needle.
6. Practice the 80/20 Rule like you would any other skill.
Applying the 80/20 Rule doesn’t just mean asking yourself,
“What’s most important?” and then moving on. Prioritization is a
skill. By learning and then using di erent mental models such as
the bottleneck analysis, ICE method, or the critical path approach,
you get di erent ways of seeing your priorities. Every time you set
your priorities is an opportunity to practice becoming better at
prioritization.
8. Do your “one thing” rst. When our day starts, we have the most
energy and the least distractions. This makes it the perfect time to
tackle the hardest, most important activity. If you leave your one
thing for later in the day, it will probably not get done on that day.
I learned about managing my days based on my energy levels in
The Power Of Full Engagement.
12. Practice saying no. Similar to how applying the 80/20 Rule is a
skill, so too is saying no. The skill is recognizing areas where we
should say no, but don’t and then devising a solution for each
situation that actually works.
Each of these steps is absolutely critical. Miss one of them and your
ability to pick and follow through on the right priorities plummets.
***
We all have 24 hours in a day. Therefore, “hustling” harder can only get
us so far.
Focus is one of the 20% of skills that give us 80% of results in our
life. It allows us to accomplish in one year what might take someone
else a decade. Furthermore, by focusing on the few things that matter
at work, we get back time in our personal life to be healthy and spend
time with loved ones.
But remember this: To get the full bene ts of focus, we need to look at
it as di cult skill that takes years of practice to develop. Focusing
sounds simple, but it requires huge emotional and cognitive resources
to follow through on consistently. This is why everyone touts the power
of focus, but few people actually truly focus.
Warren Bu ett’s strategies inspire us all to be one of the few who do.
***
[1] Disclaimer: Keep in mind that I came upon the story of Bu ett’s pilot
through a chain of people I trust, and it has been written about in several
top publications. At the same time, I take it with a grain of salt. Thank you
to a commenter below who shared this article, I’m not sure if it happened
at all, in part, or not at all. Either way, the advice is sound and has had a
big impact on my life.