Warren Buffett is a huge inspiration to me since he founded the Giving Pledge in 2009 with Bill Gates, pledged to give away 99% of his wealth to charitable causes and also asked other billionaires pledge to give away at least half of their fortunes. He taught me better than doing good in this world, you can do greater good by earning a lot of money and changing and doing things in scale to change bigger problems. Him and Bill Gates are an inspiration to me in this regard.

Buffett is an American business magnate, investor, and philanthropist. He is considered one of the most successful investors in the world and has a net worth of over 80 billion dollars, he's one of the richest people in our planet. He is noted for his adherence to value investing and for his personal frugality despite his immense wealth.

Here are 7 life lessons I'd learnt from Buffett's way of doing things: (I've also added a few tidbits from other successful people and coaches)

1. Create a Safety Net For Yourself, Your Company, and Your Family

Warren Buffett always plays a safe game even after he's gained a lot of wealth. He stays away from investments he doesn't know about. He has kept him away from Wall Street speculations. Still, he's aware that things could turn bad anytime, so he always has creates a safety net that can let him survive for a minimum period of at least a year without any income.

Warren Buffet had saved almost $1000 by the time he finished school. He also advises avoiding debts that are beyond your capability. He himself leads a simple life without the fancy cars and million dollar houses. Interestingly, Buffett still lives in the house that he lived 41 years ago.

Previously, the man who retained the title of the richest person in America, the founder of Walmart, Sam Walton also learnt the lesson of creating a safety net from his father. His father used to offer mortgage loans to farmers but was a great money manager. He risked all his money to lend to farmers in America post world war I when things were tough in America. But he always kept a coffee can full of money and a piece of land that's clear from any liabilities for use in case they would go through tough times.

Earl Nightingale, in his Strangest Secret audiobook, encourages the same – Earl encourages to save at least 10% of income all the time and never to touch it unless and until there is a dire situation. Similarly, T. Harv Eker calls this as Financial Freedom account and asks to put away 10% of all income. His money jar system is great to manage money in an effective way. Similar to Warren Buffet, Harv Eker advises to save more when your income increases and not to spend so much on living an extravagant lifestyle with the things that you don't need. (Image courtesy: http://www.smartaboutmymoney.com)

2. Choose Simplicity over Complexity

“The difference between successful people and successful people is that successful people say no to almost everything.” Warren Buffett.

Warren Buffet is a man of simplicity. He's stayed away from complex instruments such as derivatives. He stays away from businesses that he doesn't understand. He only invests in the businesses that he understands such as Insurance and Coca Cola. Being simple is to start saying NO to things that you don't need and the things that won't help you stay your course when it comes to business or life.

3. Take One Step At a Time

“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.” ~ Warren Buffett.

The journey to success is a ladder and you have to take one step at a time. Buffet has won his success by focusing on small wins. He worked on one company at a time. He also follows this for his family life.

4. Buy When Others Want To Sell

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

Business and investments always follow the pattern of supply and demand. Warren's investments have always been to buy the stocks when the prices are low; and wait in a disciplined way until the stock prices soar a lot. He does that using his value investing methodology that he learnt from his mentor Benjamin Graham. This is the secret behind his success.

I'd like to refer to two another success story: Indian Starbucks competitor Coffee Day's founder V.G. Siddhartha bought a lot of coffee plantations while others were selling them off. Now all of Coffee Day's franchises run out of the coffee beans produced by these plantations he bought for cheap a long time back. This always gives Coffee Day a competitive edge over any other competitors in India. They don't have to worry if coffee bean prices shoot up in the market because they produce their own coffee beans.

5. Avoid Speculations

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” – Warren Buffett.

Chet Holmes in his famous book “The Ultimate Sales Machine” states that he has observed that there are three types of executives. A full 90% are tactical executives, 9% are strategic executives, the remaining 1% are both strategic and tactical executives and are the most effective executives. In business and investment, tactics are cheap. Speculation is a tactic, In investment, charts and markers are tactics, Following the news is a tactic. But looking at the fundamentals and determining whether a company has the money to survive for another 10, 20, or 30 years is a strategic approach. That's what Warren Buffet does. If you want to learn more about his investment methodology, Google Value Investing.

Now, I don't know whether Warren Buffett falls under the 9% or the 1% but certainly, he doesn't fall under the 90% who follow the masses or follow the next new tactic and end up losing money. He is certainly a strategic person. He never loses money on the stock market. Chet Holmes also says that when you take a tactical action, always justify the strategy behind the decision to execute the tactic. Doing so will increase the effectiveness of the tactic 5 times over.

6. Play The Long Game

“If plan A doesn't work, the alphabet has 25 more letters – 204 if you're in Japan.” ― Claire Cook

Failure is just a detour in your path. Whenever Warren Buffett invests in a company and the company's stock prices go down – he never short-sells the stock. He only invested in this stock after he looked at the company's fundamentals and he believed in the company's vision and market potential over the long term. Warren stays invested and will wait until the stock prices jump back, and it sure does because he never buys based on speculation.

I keep hearing this from many successful people, that we should never give up on our goals. If a path you took towards a goal doesn't work, you haven't failed on the goal, just the path was wrong. We have to figure out another path that works and we can get to that destination. Successful people are the most resilient people on the planet. They never give up.

7. Take Responsibility for Your Successes and Failures

“As you move along in your career, you always want to consider your inner scorecard that is how you feel about your own performance and success. You should worry more about how well you perform rather than how well the rest of the world perceives your performance.” – Warren Buffett

We need to be able to judge ourselves on how well we are performing against our own success and failures. And have an inner compass that measures how well you are doing over your past performance. If you fail, take responsibility for that failure and don't blame anyone else for that. Learn what you did wrong and be proactive to correct that mistake in you and do it better next time.

A quick trivia: If you improve your life 1% every day over the next 365 days, how much would you have improved over the course of the 365 days? Comment your answers below. Also, let me know how and which of these lessons are you going to adopt into your life.

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