Warren Buffett, the 4th wealthiest man in the world, needs no introduction. But if you are among the very few ones who haven’t heard his name, let us briefly introduce him to you. Warren Buffett is the world’s renowned leader, known for his excellent investment skill sets and the current chairman of American holding company Berkely Hathaway Inc. You can follow this link to know more amazing facts about Warren Buffett.
Buffett is well known for his unique take on investment which emphasizes buying companies over merely buying stocks. To put it roughly, Buffett believes that investing in whole companies that follow a functional business model and investor understands well is much more worthwhile than simply investing in stocks, which are volatile. Additionally, he also endorses value investment.
Due to his numerous achievements as an investor, CEO, and business-man, people all around the world have always been curious about his secret to such immense success.
And to this Buffett’s reply has always seemed to be to read. The investment magnate has revealed in lectures, interviews, and even his company’s annual shareholder letters that he has made it a habit to consistently read every day.
1 Simple Formula to Success
Buffett compares the act of reading every day to compound interest, which refers to the interest that grows exponentially in proportion to the number of times the initial interest from the investment is reinvested.
Due to the constant investment of any profits, the interest earned by this method is much higher. Buffett is of the view that gaining information through reading adds up similarly, and benefits the user richly over time. Thus, to be as successful as possible, one should “go to bed a little smarter each day.“
This concise adage encapsulates his formula to success. In 2000, he was quoted telling a group of MBA students from Columbia School of Business to read 500 pages a day. Those who followed this advice seem to have got the sweet taste of success.
CEOs and Reading
Warren Buffett is not the only CEO that gives so much importance to the benefits of reading.
Mark Zuckerberg, Founder & CEO – Facebook, and Bill Gates, Founder – Microsoft Corporation, and allegedly the richest man in the world, have also expressed a love for reading.
Zuckerberg’s passion for the activity took concrete form in 2015 when he introduced the Facebook Book Club with the goal to read 23 books in a year. The selection of titles mainly consisted of non-fiction with the aim to educate readers on various diverse topics ranging from technology to culture.
Many of the titles in this list were also recommendations Bill Gates has made over the course of his career. Titles included The Better Angels of Our Nature: Why Violence has Declined by Steven Pinker; On Immunity by Eula Biss; and aking the Modern World – Materializing and Dematerializing by Vaclav Smil, Gates’ favourite author.
Many motivational pieces published on the internet make the lofty claim that the secret to becoming a successful CEO is reading, but the correlation is not yet backed by research.
However, a more rational approach to understanding the connection would be to look at the benefits of reading as a whole.
The act of reading is a holistic mental workout that engages various psychological processes like understanding, interpreting, learning, and memorizing new information. Thus, reading builds a richer world view, greater sensibilities, and a vast trove of knowledge. Additionally, reading increases empathy and mental flexibility. Studies have also shown that reading regularly decreases the chances of developing dementia later in life.