Warren Buffett’s 80% rule: The most successful people spend a great deal of time reading and thinking

The story of Warren Buffett is no secret. He is the most successful investor of our time. He’s made billions for decades. He is excellent at what he does.

And his investment advice is timeless.

The irony is that he rarely makes decisions. And when he does, he is in it for the long haul. He likes to buy and hold “forever”.

And before he invests, he reads a lot of annual reports. A lot of them.

He likes to be informed before he buys and hold for eternity. And that process also involves a lot of thinking too.

Warren Buffet has spent 80% of his career reading and thinking. He takes reading to the extreme. And that habit has paid off for decades.

“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking and make less impulse decisions than most people in business. I do it because I like this kind of life.” Warren Buffett said.

Many investors make a lot of impulse decisions. The temptation to respond to market changes is so high that, without good judgment, you will be making a lot of mistakes.

Warren already knows that. So he reads and thinks to make sure every move is worth it because he doesn’t like to interrupt the compound growth unnecessarily.

You can quickly improve your odds of success when you embrace compound learning

Reading and thinking is a valuable growth process. A small investment of your time reading every day can compound over time and return impressive results.

In a few years, you would accumulate so much knowledge that can guide your decision-making process. With time, everything you choose to learn and apply will improve your expertise.

Here’s what Buffett’s business partner, Charlie Munger, says about reading: “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time. None. Zero.”

Warren Buffet and Charlie Munger are both billionaires because they value learning and the correct application of knowledge. Buffett says anyone hoping to succeed in life or career should value knowledge.

“I just sit in my office and read all day,” Warren Buffett once said. That’s how you become an intelligent investor. You dig for practical information to help you make your best decision every time to choose to invest.

We can all use the same approach to improve almost every area of our lives. Want to improve your career skills? Make time to learn. Want to build better habits? Learn the essential habits and practices that compound over time and make you a better version of yourself? Want to improve your relationship? Learn from those with the best experiences?

You can improve every area of your life with new knowledge. As long as you are ready and willing to adjust your behaviour or action when you find brilliant knowledge, you will get better.

“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you,” Charlie Munger once said.

Becoming a life-long learner will change your life. Not only will you get smarter, but you will also upgrade your perceptions, worldview, decision-making processes and ultimately, the trajectory of your life. Reading is one of the best ways to invest in yourself.

Buffett and Munger are not the only billionaires who credit their success to reading. Elon Musk, Bill Gates, Mark Zuckerberg, Mark Cuban and many others commit quality time to upgrade their knowledge every day.

When you aim to go to bed wiser than you were yesterday, you will find and read great books every day — choose to read more deliberately.

The key takeaway is that 80% of your success comes down to 20% of the things you learn. Reading and thinking can do more for your life and career than you think.

This quote by Warren Buffett when he was asked the key to success explains this post beautifully: “Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

This article first appeared on Medium.