Warren Buffett: This investment will increase your net worth by 50%

If they just they increase their value at least 50 percent. So, I was recently watching an interview with Warren Buffett, and he said something so impactful I just had to make a video on it. Buffett recommended an investment anyone can make that will instantly increase their net worth by 50 percent. It's not what you think, so make sure to stick around to the end of the video because this could be the best performing investment you will ever make. Want to know how I know that? I've already made this investment, and it has dramatically increased my net worth and earnings potential. Buffett knows it can do the same thing for you.

Well, by far the best investment you can make is in yourself. I mean that, for example, communication skills. I tell those students that come, that they're going to graduate schools in business, and they're learning all these complicated formulas. All that, if they just learn to communicate better, and both in writing and in person, they increase their value at least 50 percent. Now, I mean, if you can't communicate somebody, he says, you know, it's like winking at a girl in the dark; nothing happens, you know, basically. And you have to be able to get forth your ideas, and that's relatively easy. I did it myself with the Dale Carnegie course. Some people wish I'd taken a shorter course now, my insurance by talking later on, but it's just hugely important. If you invest in yourself, nobody can take it away from you.

I mean, you have just one mind and one body in this world. You can't start taking care of it when you're 50. By that time, you'll have rushed it out if you haven't done anything. So, you should really make sure that you just remember that you just got one mind and body to get through life with. Then do the most with it.

What about life advice? Well, life advice is, you know, the most important thing, aside from the things I've talked about already, is it's really who you associate with. You want to associate with people that are better than you are. I mean, basically, you'll go in the direction of the people that you associate with, and you want to have the right heroes. If you want to emulate somebody, you better pick very carefully who you want to emulate. And when, obviously, you can't pick your parents; they're going to have enormous influence on you, but you don’t get a choice on that.

You get choices as you go down the line and who you admire, who you want to copy. The most important for most people in terms of that decision is their spouse. It's also important in terms of a partner in business. The partner in life is the most important one. You want to pick a spouse that's a little bit better than you are, and then he or she, and hopefully, you hope they don't figure it out too fast.

Great, as Buffett mentioned in the clip, being able to effectively communicate and persuade people is one of the most important skills when it comes to building wealth. In fact, Buffett says that he values the certificate he received at the end of a public speaking course more than his master's degree from Columbia University, one of the most prestigious schools in the world. Buffett's ability to communicate and persuade people has helped him become one of the richest people in the entire world.

The good news is that you can learn the skills Buffett has used during the rest of this video. But if I learned these skills when he read the legendary book "How to Win Friends and Influence People" by author Dale Carnegie decades ago, here are the top five takeaways from this book and how Buffett has applied them in his own life to help him become the billionaire he is today.

Number four on the list is my personal favorite. If you're enjoying this video, make sure to subscribe to the channel because it's my goal to make you a better investor by studying the world's greatest investors. Our community is approaching two hundred thousand people strong, and it would be even better with you as a part of it.

Number one on the list is don't criticize people. Humans tend to think very highly of themselves; that's human nature for most people. The person they care about most in the entire world is themselves. Whenever someone is criticized, that person will automatically not like whoever criticized them. Warren understands this rule well. Warren Buffett is the CEO of Berkshire Hathaway. Now, Berkshire Hathaway owns a collection of many different businesses that are each run by their own CEO. As CEO of Berkshire, Buffett is the boss of each of these CEOs. Whenever one of these CEOs makes a mistake, Buffett rarely, if ever, criticizes them, especially in public.

Each year, Warren sits in front of 40,000 people and millions of online viewers and answers questions for hours during the Berkshire Hathaway annual shareholders meeting. He often gets asked about why one of Berkshire's companies made a mistake. Now, this would be the perfect opportunity for Buffett to blame the CEO of the company for that mistake. After all, the CEO is the one who made that decision, and Buffett is very much hands-off.

However, instead of criticizing the CEO in front of millions of people, Buffett always takes the blame himself. He blames himself for the mistake even though he wasn't the one that made it. Imagine how much loyalty and respect this gets Buffett from the CEOs of his companies. It's no wonder the managers that work under him love him so much. Here's what Buffett had to say when asked why the people helping him manage Berkshire's stock portfolio were underperforming the market: "They are extraordinary managers; it has not been... it was a tough... it's been a tough period to beat the S&P. We are enormously better off because the two are with us. And while we have that measurement, like I said, I'll just put it this way, they're doing better than I am anyway."

So, this leads us into number two on our list: be generous with praise. Everyone wants to feel important and appreciated. Buffett is highly skilled at this. In an interview, Buffett was asked how he decided to invest in Apple. As a quick side note, Apple has been Buffett's most successful investment ever in dollar terms. Buffett's profit on this investment in Apple is well over a hundred billion dollars. Instead of taking credit for the idea and further building his reputation as the greatest investor ever, he gave credit for that idea to a guy that works for him. Yes, that's right; he gave credit for the idea to Todd Combs, one of Buffett's so-called lieutenants that help him manage the stock portfolio of Berkshire Hathaway.

Imagine how this made Todd Combs feel. Do you think he's going to work even harder for Buffett in helping him find another great stock idea? Of course he is. Never in a million years would a Wall Street investor go on national television and give credit for one of the greatest investments of all time to someone who works for him. This is what makes Buffett so unique and successful. He is willing to be generous with praise. He knows that in the long term, this will ultimately benefit him as his employees will be more loyal and hardworking.

There's even been rumors going around that people have offered Todd Combs hundreds of millions of dollars to leave Berkshire Hathaway and have asked for them. Even though this is way more money than what he makes working for Buffett, Todd always turns these offers down because he loves working with Warren. Listen to how Buffett praised Jack Bogle, the founder of Vanguard and the father of index investing: "Jack Bogle, who I talked about in the annual report, Jack Bogle has probably done more for the American investor than any man in the country. Jack, could you stand up? There he is."

Number three on the list is to talk in terms of the other person's wants. The best way to explain what this means is to give you an example. Let's say you want to go with your significant other to a sporting event. The only problem is that your significant other hates sports. When you're trying to convince him or her, you want to view things from their perspective and focus on the things that would make them want to go. So, instead of talking about the game that you'll be watching, focus instead on talking about how after the game, you'll be going to her favorite restaurant. You will be much more successful talking in terms of the other person's wants than your own.

This concept works just as well in business, and Warren Buffett proves it. One of the biggest jobs Warren has as CEO of Berkshire Hathaway is to find new companies for Berkshire to buy. Warren and Berkshire only want to buy great businesses. As I'm sure you could imagine, the owners of these great businesses have a lot of people trying to buy them—many of whom are willing to pay more than Buffett. Warren has to convince the owner to sell to him over the other options.

Buffett, as a buyer of the business and the seller of the business, have differing wants. The biggest thing Buffett wants is to pay as little as possible for the business. The seller, on the other hand, wants as much for the business as possible. Additionally, the seller probably wants some other things. These can include things like maintaining control of the day-to-day operations, making sure the employees are taken care of, and that the business won't have to be sold again in just a few years. When Buffett is negotiating with a seller, he focuses on addressing these other wants that the seller has. This is how Buffett and Berkshire are able to buy great businesses despite not paying the most.

Number four on the list is to avoid arguments. Charlie Munger's idol, Ben Franklin, summed it up perfectly: "If you argue and contradict, you may achieve a victory sometimes, but it will be an empty victory because you will never get your opponent's goodwill. There is no way to win an argument, so just don't argue." If you feel as if you won because the other person accepted your point of view, you've still lost. Over the longer term, you have made the other person feel inferior and probably hurt their pride. So, you've now lost their goodwill. Over the long term, you are actually the loser.

Avoid arguments whenever possible. Warren Buffett takes this to the extreme. Warren and Charlie Munger have been business partners for over 50 years. In the decades that they have been partners, guess how many arguments they've had? Zero. This has been a huge contributing factor as to why their partnership has been so successful. Both Warren and Charlie understand the importance of avoiding arguments. If Charlie wants to make an investment and Warren doesn't, they just won't move forward unless they are able to come to an agreement. Here's what Charlie had to say about why he and Warren don't ever argue: "We never had an argument. We just kind of roll with it easily. We never had a fight. But suppose Warren doesn't want to do something that I would have done. And suppose that happens four times over 40 years or something. What the hell difference does it make to me?"

Buffett learned the importance of avoiding arguments the hard way. Before Berkshire Hathaway was the sprawling conglomerate it is today, years ago it was a failing textile company. A much younger Warren Buffett was a big investor in the company, and his plan was simple: the business was selling off its equipment and using the cash to buy back shares from investors. Buffett was betting on getting his shares bought out at a slightly higher price than he paid. After a while, Buffett got a call from the owner of the business. The owner offered to buy Buffett's shares at an agreed-upon price. When the official offer got sent to Buffett, the purchase price was 1/8 of a dollar lower than what Buffett and the owner had agreed to.

Now, Warren was understandably mad. He then proceeded to buy up as many shares of the failing textile business as possible. They kicked out the owner of the business and became CEO of Berkshire Hathaway. Even though Buffett won this argument, he actually lost. Buffett was now the owner of a failing business, and the entire town that the business was in took the side of the owner. The paper even ran articles about how horrible Warren was. Given how rich Buffett is now, this story ultimately does have a happy ending. However, this taught Warren a first-hand lesson on the importance of avoiding arguments.

Number five is to be quick to acknowledge your own mistakes. In the world of investing, it's not very common that you hear investors admit when they have made a mistake. Most professional investors will brush it under the rug and pretend it never happened. Not Warren. One of the reasons why Warren Buffett is so likable is that he isn't afraid to admit when he was wrong. As an investor, you will make plenty of mistakes; some of those mistakes will be passing on an investment that you should have made. Buffett has made this mistake plenty of times in his career, and he isn't afraid to admit it.

"How come you don't buy shares of Amazon?" "Stupidity." I think one of the reasons Warren is so likable is because he freely admits whenever he makes a mistake. This is the exact opposite of how most people act. Buffett's willingness to go against the crowd and admit when he is wrong is part of the reason why he's been able to be incredibly successful for decades now.

So, there you have it. I hope you enjoyed this video. If you've made it this far, make sure to like this video and subscribe to the channel because hopefully, you got something out of this video. Check out this other video on the channel here because if you enjoyed the video you just watched, you'll like this one too. Talk to you again soon.