When Warren Buffett Was 7 Years Old, He Read This 1 Book. It Inspired His Whole Career
It's 83 years old, but I found it and read it. (Plus 5 more things worth reading today.)
|Bill Murphy Jr.||Oct 28, 2019|| 2|
When Warren Buffett was 7, he read a book called One Thousand Ways to Make $1,000. Read it to pieces, in fact. He became obsessed.
Decades ago, Fortune ran a profile that described him as having "virtually memorized" it.
First published in 1936, One Thousand Ways has been out of print for decades. But last year, I found it and read it.
I’m Bill Murphy Jr. Welcome to Understandably. Have you signed up for the daily email?
Of course, the book is dated, and some of the language will make you cringe. But if you can get past that, it's also very inspiring.
Here are five big takeaways.
1. Get started right now
The core of the book, and what inspired Buffett to begin with, is one example after another of people making money. The cumulative effect leaves an impression.
There’s the guy who started the Hires Root Beer company. Then the story of J.C. Penney. Then a New York City widow who turned her last $38 into a million-dollar coffee empire.
Then a woman who built a tomato juice empire, and a man who started a roadside tire repair business. On and on and on.
Buffett also took from this that if you start young, as he was when he first read it, the interest from your financial victories will compound—and your investments will pay off more.
2. Do what you know
Almost every person profiled in One Thousand Ways launched a business based on something that he or she already had expertise in.
This is opposed to the idea of simply seeing a big potential market, and then trying to develop a product or service to serve that market.
In other words, almost every single entrepreneur profiled in One Thousand Ways could be his or her own customer. Some of them turn their hobbies and the things they saw in their own backyards into mammoth businesses.
3. Don’t worry about the economy
Even before I read this book, it struck me: It came out at the absolute nadir of the Great Depression, when unemployment hit nearly 20 percent.
We're talking real Grapes of Wrath times. The author, listed as Frances Minaker, nevertheless talks about the bad economy as impetus for launching, not as an excuse for inaction.
In fairness, some segments of economic cycles are better for starting a business than others. But anytime is better than never.
4. Ordinary people can become extraordinary
Almost nobody in the book came from money. Virtually none of them took outside investment, at least until their companies grew really big.
They're almost all just ordinary people, struggling to start against the backdrop of the Great Depression.
Now, Buffett wasn't a deprived child by any means.
But looking at the businesses he started and invested in even at a very young age, he seems to have asked himself the same question that is practically shouted on every page of this 83-year-old book: Why someone else? Why not you?
5. Every generation thinks they have it harder
Minaker has a bit of disdain for the younger generation at that time--the same generation that would go on in a few years to win World War II.
For example, this passage, comparing people of the 1930s and 1940s with hearty entrepreneurs of an earlier time, made me smile:
How different from the average young men of today! They are usually more interested in having a good time than they are establishing themselves in a business of their own. ...
They concentrate on enjoying themselves, serene in their philosophy that tomorrow is another day.
Just imagine that we replace the phrase "average young men of today" in that passage with "Millennials." The more things change, the more they stay the same.
Here are 5 more things worth checking out today:
One-day delivery is great. But New York City isn’t sure what to do with all the trucks. (The New York Times)
President Trump announced U.S. forces killed Islamic State leader Abu Bakr Al-Baghdadi. In case you’re don’t know the background, here we go. (Bloomberg)
One of the world’s biggest malls took 17 years to build. It just opened (well, started to open) in New Jersey. (NJ.com)
Popeyes launched a hugely popular sandwich, then ran out of chicken. Now it says it’s coming back. (The Wall Street Journal)
Microsoft got rid of phone interviews to recruit brilliant people who happen to have autism. (Also, The Wall Street Journal)