Warren Buffet is considered one of the most successful investors in the world. So when you hear there is a strategy he has used to build his $76 billion (Sh7.8 trillion) fortune, you probably ought to sit up and take notice.
One of his world-famous tips for maximising results is the 20-slot rule.
Here’s how it works. Imagine you could only make 20 investments in your lifetime, and once you made one, it filled a slot on a piece of paper. And once you fill a slot, you can’t undo it.
The idea is to get you to really think about what it would mean if you had just 20 opportunities to invest your money. You’d likely take a beat before rushing into making a purchase or getting behind the latest business trends in the market, which means you would do better. The 20-slot rule asks you to be aware that opportunities are limited, so don’t waste your time and money on decisions that won’t pay off. So, what are some of the ways this rule can be brought to life?
1. Think long term
Buffet learnt the art of investing when he was just 11, setting aside the money he earned while delivering newspapers. By the time he was 15, he was worth Sh616,000 at current exchange rates. At 11, most of us were spending any money we earned on sweets; few of us thought long term. It’s a crutch that follows us into our adulthood — we tend to waste an unexpected windfall rather than buy 100 shares in a company or start a small business. Don’t waste one of your 20 slots on an incredibly fleeting moment.
When you think about being able to channel your extra money into just 20 opportunities, you have to think harder about what you’re really passionate about. You won’t blindly do what your friends are doing or fall for something that won’t last.
3. Think beyond investment
This rule was intended to be extended to the office, not just your investment portfolio. Become choosy with what you spend your time on, and accept that you can only work on a certain number of tasks a day – figure out which ones deserve slots.