Copyright © 2008 Ed Bagley
Imagine my surprise Wednesday (3-5-08) when I discovered that Warren Buffett, who has played second fiddle to Bill Gates as the world’s richest man for several years, is now the wealthiest billionaire in the world with a net worth of $62 billion.
For the uninitiated, a billion dollars is a million dollars 1,000 times. At $62 billion, you could also say that Buffett is worth a million dollars 62,000 times. Gates slipped to No. 3 at $58 billion on the just released 2008 list by Forbes magazine.
Equally surprising to me was the fact that, after reading The Tao of Warren Buffett, I discovered that Buffett had some very valuable information on what students should know when selecting their first job after graduating.
“Managing your career is like investing—the degree of difficulty does not count,” said Buffett. “So you can save yourself money and pain by getting on the right train.”
According to Buffett, one not only needs to learn what kind of business to invest in but what kind of business to work in.
If one goes to work for a company with poor long-term economics, then he (or she) can never expect to do really well because the company does not do well. Salaries will be below average and raises will be few and far between, and there is greater risk of losing your job because management will always be under pressure to cut costs.
But if you go to work for a company that has great long-term economics working in its favor, then the company will be awash in cash. This means higher salaries and tons of raises and promotions for a job well done. Plus there will be plenty of room for advancement as management looks for ways to spend all that free cash.
In short, Buffett says you want to work for a company that has high margins (of profit) and makes lots of money. And you want to stay away from businesses that have low margins and lose money.
One is a first-class train ride to Easy Street; the other is a long, slow, hard freight-train ride to nowhere in Siberia.
A good example of a company with high margins, no debt and billions in cash reserve is Microsoft.
The next step to getting on with your career is to also work for a company that allows you to do what you love doing.
“There comes a time when you ought to start doing what you want,” says Buffett. “Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you do not like because you think that it will look good on your resume. Isn’t that a little like saving up sex for your old age?”
It is not hard to figure out why Buffett is a very smart person. He did not become the wealthiest man in the world by being stupid. It takes no talent to lose money; it takes a lot of talent to make a lot of money.
According to Buffett, spending a life getting up and going to a job that you hate, with people you do not respect, leads to frustration and discontent, which you bring home with you from work and share with your family, which makes them unhappy as well. This, of course, makes for a lousy life for everyone you love, including yourself.
When you find a job you love, going to work puts a smile on your face, which you can take home with you at the end of the day to share with your loved ones.
If you are worried about money, remember that the people who love what they are doing are the ones who rise to the top of their fields and end up making the most money. Do what you love, says Buffett, and the money will come.
(Editor’s Note: The Tao of Warren Buffett is written by Mary Buffett (Warren’s daughter-in-law) and David Clark, both of whom were the best-selling authors ofBuffettology.