Warren Buffett once told Georgia Tech students that the only true gauge of success was love.
Buffett’s approach to life would appear to be reflected in his pledge to donate almost his entire fortune to charity.
Buffett has maintained a compounded annual return of nearly 21 percent — more than double that of the S&P 500 — over more than 50 years.
Prior to Warren Buffett, asset management seemed a pretty unlikely route to achieving folk hero status. However, not only has Buffett managed to defy any conception of what was actually possible for an investor by growing his fortune from almost nothing to about $80 billion in a single lifetime, but his folksy wisdom about the importance of living a balanced life has made him a beloved public figure.
That point really gets hammered home for readers of Alice Schroeder’s biography of the Oracle of Omaha when she covers Buffett addressing students at Georgia Tech. When asked what truly defined success, Buffett responded that it was actually really simple: love. Here’s what you should know about Buffett’s surprising tip.
Can’t Buy Me Love, or at Least so Says Buffett
Here’s the full quote from “The Snowball: Warren Buffett and the Business of Life”:
“Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.
“I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is; your life is a disaster.
“That’s the ultimate test of how you have lived your life. The trouble with love is that you can’t buy it. You can buy sex. You can buy testimonial dinners. But the only way to get love is to be lovable. It’s very irritating if you have a lot of money. You’d like to think you could write a check: I’ll buy a million dollars’ worth of love. But it doesn’t work that way. The more you give love away, the more you get.”
Buffett’s approach is certainly one that’s refreshing to hear — if maybe a little bit easier to believe when you’re widely loved and worth about $80 billion — and it’s just another example of the famed investor bucking expectations.
Whereas plenty of billionaires might seem focused on themselves, it’s hard to argue that Buffett has let his success go to his head. As a member of The Giving Pledge, Buffett has already promised to give away more than 99 percent of his enormous fortune, and he famously requested to have Congress raise his taxes in a call for fairness.
Warren Buffett’s Astonishing Run of Success
Focusing on how special Buffett is frequently centers on his pearls of wisdom or his charitable heart. But it’s also worth keeping well in focus his truly incredible success as an investor over the years. Given how ideas like the efficient market hypothesis and modern portfolio theory continue to point toward the idea that it’s almost impossible to beat the market, Buffett has made it a habit.
Despite the fact that there are very few fund managers out there who can beat the market for any sort of sustained period, Buffett’s nearly 21 percent compounded annual gain over more than 50 years, according to Berkshire Hathaway’s 2016 annual report, is beyond jaw-dropping. Whereas most managers are struggling to get 1 or 2 percentage points on the S&P 500, Buffett has more than doubled its returns and done so for more than half a century.
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This article originally appeared on GOBankingRates.com: Warren Buffett Measures Success With This Four-Letter Word