Warren Buffett Just Solved the 2 Big Problems That All Successful People Face (Eventually)

When Warren Buffett drops knowledge, I’m there to pick it up. In fact, I’ve written a free ebook of collected wisdom from the Oracle of Omaha: Warren Buffett Predicts the Future, which you can download here for free.

This week, Buffett released a 1,200-word statement about philanthropy. I read it immediately, then reread it, and then annotated the heck out of it.

Bottom line upfront: Buffett wanted to announce that he has now reached the point where he’s donated to charity 50 percent of the Berkshire Hathaway “A” shares he once held. 

Dig just a little bit deeper into his statement however, and you’ll find Buffett’s take on two of the biggest dilemmas that extremely successful people often face.

Granted, they’re the kinds of “good problems” that a lot the rest of us hope we’ll one day confront. But, here’s how Buffett solved them.  

Dilemma #1: When should you give back?

I wrote a book about Harvard Business School. More than once during my research, I heard students and alumni refer to a three-part life-plan for people who were convinced they were going to be wealthy and successful. 

It went like this: First learn, then earn, then return.

The idea is that you can educate yourself on how to amass great wealth, then go out there and accumulate it. (We’ll save the discussion of whether “earn” is truly the right word here, but it’s what they use).

Then, having reached at least the “‘Forget You’ Money” level, you deign to donate to causes you feel deserve it.

At age 90, more than seven decades into “learn” and “earn,” Buffett seems unsure still when, exactly, people should pivot to philanthropy:

Over many decades I have accumulated an almost incomprehensible sum simply by doing what I love to do. I’ve made no sacrifice nor has my family. Compound interest, a long runway, wonderful associates and our incredible country have simply worked their magic. Society has a use for my money; I don’t. 

A much more admirable form of philanthropy than mine involves the giving of personal time and effort. I’ve done little of that. 

At the same time, he points out, had he held onto the shares he donated in years past and given them away now, they would have been worth multitudes more than they were at the time he gave them away.

My 16 annual contributions to the five foundations I’ve funded were worth $41 billion when disbursed. As I instructed, the funds were spent or committed quite promptly. 

Had I waited until now to give the shares, they would have instead brought $100 billion to the five foundations. The question then becomes: Would society ultimately have benefited more if I had waited longer to distribute the shares? 

For better or worse, the past is past; Buffett came to his philanthropic philosophy late in life, and also gave away his shares when they were worth a lot less than they are today. Which would have been the better model?

Dilemma #2: Why keep going?

Did you notice the part where Buffett is now worth more than $100 billion? And he’s 90 years old?

As he put it, “I’m clearly playing in a game that, for me, has moved past the fourth quarter into overtime.” 

So, the question becomes: Why keep at it? Why not just donate almost everything at this point, and spend your days on the golf course, or the beach, or wherever you’d be most happy?

Buffett’s answer, and one that I think will resonate, is imply that this is where he’s most happy:

Over many decades I have accumulated an almost incomprehensible sum simply by doing what I love to do. I’ve made no sacrifice nor has my family. Compound interest, a long runway, wonderful associates and our incredible country have simply worked their magic. Society has a use for my money; I don’t. 

Please understand that these remarks are no swan song; I continue at my enjoyable job, doing what I like, aided by associates I like and working to deploy the savings of people who have long trusted me. I still relish being on the field and carrying the ball. 

People talk about these two dilemmas, but it seems to me the answers become quite simple.  

On philanthropy? Give what you can as soon as you can, regardless of whether what you have to give more might be worth more in the future.

And as for when to retire? The short answer is: Don’t, at least if you think Buffett really has it down right. Chances are you got into this game because of something you love. As long as you still love it, keep at it.

Don’t forget the free ebook: Warren Buffett Predicts the Future. You can download it here.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.





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