Why I Chose this Book

I was listening to a podcast from djvlad (I think it was this one) and during an advertisement he mentioned that the book The Snowball: Warren Buffett and the Business of Life was a very influential book in his life. I’m interested in learning about finances, wealth, and investing so I figured I’d give it a look. I believe the next day or within the next few days I went to the website overdrive.com to see if an audiobook version was available and I was surprised to see that it was.  I would expect this book to be pretty popular because of its subject and normally popular books such as this have a waiting list, but I was able to download it immediately.

Warren Buffett will probably be recorded in history for a long time as one of the wealthiest men in history and it will be noted how he became so wealthy. Typically most of the wealthiest men of all time have either been rulers of nations or they have started very innovative companies with products that have essentially changed the world at that time. From what I understood, Warren Buffett acquired his wealth neither as a king nor as an inventor. He became wealthy through investing, something more accessible to the common man, it would seem. And since his rise to fame, many have tried to emulate his success. Being someone of such high caliber I figured it only makes sense to at least learn a little bit more about this man.

The Snowball

Warren Buffett is one of the richest men in history. He has become wealthy through investing. Many have invested as well, but none have reached his level of success through the same means, yet. How did he do it? I was once told that the Chinese have a saying that there are three keys to success: the right time, the right place and the right people. From this book, we see that Warren Buffett benefited from these three characteristics.

The book starts with Warren Buffett’s childhood, then progresses to his college years, post-grad, thirties, forties, and so on. At an early age, Buffett exhibited a propensity to numbers and math. He also displayed an uncanny memory. He would memorize license plates of cars that drove by his house just in case a crime had been committed nearby and he could help identify the getaway car. At an early age Buffett read the book about 1000 Ways to Make $1,000. From a very young age, Buffett started his own businesses such as selling newspapers and pinball machines. He was on a mission and would become a successful businessman before graduating high school and accumulate an impressive amount of money for anyone his age and even older.

When young Buffett was focusing on his business ventures he was freed from distractions because his mom would often take care of him and he could get away with somethings that his siblings couldn’t. This reliance on a caretaker even lasted throughout his life and extended into his college years and his marriage.  As a freshman in college, his roommate noticed that Buffett didn’t clean up after himself or knew how to take care of himself much. He didn’t have to grow up. Buffett’s narrow focus was not without its drawbacks though.

Even after Buffett married and started a family, his wife Susie, took care of Buffett and the kids much the same. We see that his wife, Susie, searched for ways to fill her longing for her husband. She would become involved in charities, philanthropic pursuits, helping the less fortunate, etc. Buffett was very disengaged with his wife and children. Some people would even jokingly question if Buffett recognized his own kids. He always had time to focus on his business, freed from distractions. Eventually though, Buffett’s time away from his wife Susie became too unbearable for her and the two eventually separated though never divorced.

It almost seems inevitable that “success” and marriage or happiness/work-life balance are inversely related. We are grateful to the many people that have brought us innovations and changed society for the better, but often their many sacrifices go unnoticed.

Though Buffett’s relationship with his family could be described as somewhat distant, the socially awkward entrepreneur did take it upon himself to improve his interpersonal skills by both reading Dale Carnegie’s How to Win Friends and Influence People and later enrolling in Carnegie’s public speaking course. He also identified a notable investor, one of the best, Benjamin Graham, and made a way to learn from him directly. Buffett would enroll in the school of his eventual mentor and take his class. Much of Buffett’s investing style is based on Graham’s investing principles.

It is said that the best way to learn something is to teach it. We see that Warren Buffett thought of himself as a teacher and often taught by frequently writing articles or other forms of written communication that explained financial matters. He also taught people such as Kay Graham face-to-face. I wonder if this aspect also contributed to his keen business sense and success. Also important to note, Buffett was frugal and had a voracious reading habit.

Focus on being important for success. Go work for who you admire the most. Don’t waste time taking in-between jobs just because they will look good on your resume. Have an “inner score card” or in other words, believe in following your inner moral code rather than basing your actions on other’s opinions. Very few people should be active investors. The wealthy should pay taxes. The wealthy owe something back to society. These are some of the lessons and opinions that Buffett have expressed throughout the years.

One of the richest men in history was born in one of the richest countries in history. He was born to a father who was a stockbroker and banker who would eventually become a congressman. Buffett’s grandfather owned his own business, a grocery store. I can only imagine that being surrounded by these people at such an early age would at least have stretched his idea of possibilities subconsciously farther than any other average American at the time. Buffett was also born a white male in a time and place in which other ethnicities such as African Americans and Latinos were legally discriminated against financially and socially. Also, women of all “races” were not expected to fill important positions. In addition, bargain stocks were more plentiful when he began investing and since then, more barriers have been erected to obtaining these same kinds of opportunities. Buffett’s privilege does not escape him as he dubs his lot in life as “winning the ovarian lottery.” Though Warren Buffett benefited from being born at the right time, in the right place and having the right people in his life, one cannot overlook his focus, his drive, his intelligence, and his hard work to take advantage of his many opportunities.

Conclusion

I used to imagine that the billionaire investor Warren Buffett made his riches simply by analyzing the right stocks and knowing when to buy and sell. This was and is part of his success story, but it’s also important to know that he was business savvy. He understood business operations and often interceded in a business that he owned to make it more profitable. That is another key factor that’s not so commonly portrayed.

We see the progression of Warren Buffett from precocious kid, to ambitious college student, to successful money manager, to famed businessman, to the legendary billionaire. Also interspersed throughout the book are what I would call minibiographies of different influential people in Buffett’s life such as Benjamin Graham and Rose Blumkin. Schroeder details seemingly significant business events such as the Sutherland debacle, the growing relationship with Bill Gates, and the Coke incident. Throughout the book, we get small pieces of Buffett’s investing strategy though that is not the focus of this book. Alice Shroeder’s study of Warren Buffett focuses on his personality and personal life. This book does a good job of humanizing the billionaire Warren Buffett and helps the reader understand the Oracle of Omaha a little bit more.

Sidenote: I think it’s interesting that at one point the young and awkward Warren Buffett who had so much trouble dating women, managed to date Miss Nebraska 1949, Vanita Mae Brown. This was before he was rich and famous, just to be clear.

Narration

This book was narrated by Kirsten Potter and published by Penguin Random House Audio Publishing Group. This production was well done.