Warren Buffett & Jay - Z - Billionaire Investing Secrets (Interview with Forbes)

about the business we're in, you know, for a long time, music, I didn't like touring, you know, now they're inventing these 360s, no. I don't want this to be like attacking a record company, but now, by doing this, you can do it now. You could have done 20 years with this 360 model and it's like no, that's not what you know the record company records. The company is not in the touring business, so why would an artist sign the rights to you? And that's not what you do. It's not your area of ​​expertise. You know, but it's us.

You know we're with the biggest concert promoter there is. you know we like to release so many different aspects of music, we like it, we like it more now and, um, you know, we're getting better at it, you know, just to open ourselves up to different things. Avenues you know to make us successful, so doing clothing tours, T and movies, publishing, you know, I just don't want to compete with them. St, no, I'm not interested yet, but then on tour you're wise enough or big enough for something where you don't mind sharing billing with Eminem or Bono, yeah, it's fun for me for one and two, like we said in college, you know, 1 plus one is three for me, you know, I don't have that. ego where you know I have to be the only guy on the bill or the only one people look at, you know, I'm fine with hanging out with other other artists, I've been doing it my whole career, you know, before Eminem, before Bono, it was, you know Kelly or 50 Cent or you know DMX, you know, I've been doing it my whole career, I just think you know how to give people a better package, you know when they leave the concert hall they want to come back another time, you know, you can take them there the first time, you know, if what you're putting in isn't amazing and shocking, then why would they go back the second time, you know?

I think that's a lot of you, you know a lot of people make that mistake. They know when they are hot at the moment. They know they just sell them. They know that they sell the name and they sell the moment. Yes, that brilliant one. things that you fall in love with, shiny things that you sell in the moment and then when people come to the concert they don't have the experience, well we're overdoing it by providing the experience, you know, not only are you going to get Eminem, but you're going to get Eminem. mjz you won't just get Bono, you'll get Bono and JayZ, you can't, you can't help but leave that concert, you know, almost like a once in a lifetime experience, every time, that's what I am. trying to create oh Warren, you said you wouldn't want to run against Jay, what advice would you give him?

Do you like businesses where you say there's a moat where competitors can't get you? What advice would you give Jay about building Moes? Well, he's building Moes. I mean, all the time. I mean, obviously, and that's why he's successful despite. he's past the age that you normally associate his field with, so the best vote you can have is your own Talent, you know, I mean, they can't, they can't take it away from you, inflation can't take it away from you. taxes can't take that away from you, so when I talk to students I look at these students and I say, you know you're a million dollar asset.

I would pay you $100,000 for the mba for 10% of the rest of your lifetime earnings, so that makes you a million dollar asset now, if you can do something to increase that value by 50%, if you can learn to communicate better verbally or in writing and you become 50% better, that's $500,000 just for improving yourself, I mean. Nobody can take that away from you, so I urge everyone you know and then I talk to them in high school about this and colleges just develop the habits, you have the brain power, you have the energy, but Develop the habits of success and look at your around the people you admire, you know, and list what makes you admire them compared to someone else who seems equally strong or equally talented, and those are things you can do, I mean, just write. them down and and and uh you know people like people who are they like them if they're funny and they're friendly if they're if they're uh if they give credit to the other guy I mean, we don't like them if they're stingy, ya you know, or they overdo it and overpromise and all that kind of stuff, well, that's a decision you make, so I encourage everyone to build their own way around it, Jay.

Do you have any advice you'd like to give Warren about building Moes? I mean, what do I say to this man? He can do things. I can't do, believe me, I can't do anything. He is a brilliant thinker. This then becomes uh to uh. What is money to you? You have had great success. You haven't made the mistakes that others made to be successful and then let them destroy your discipline. In terms of, there's only so many bets we can eat either burgers or. Whatever the added value is, we'll start with Warren maybe you can start this part of the conversation.

The added value that you always had was that you could use Capital and multiply it, which meant more business, more people for pensions, more hiring, that was a great service. I was doing real public good, but a few years ago you decided that you were going to do something besides multiply capital, which meant opportunity and a higher standard of living, well, Steve, if you go back to when I was 20 years old. I mean, it sounds disgusting, but I really knew I was going to get rich. I mean, I just learned something that was going to work and, uh, my wife and I decided then, I mean, she was 100% on board. first wife and in this and we were going to enjoy life, we were going to have everything we could possibly use or need, but by the way, I think that a $5 dinner in many cases is better than a $100 dinner, so I don't know the cost of living. and the standard of living is not necessarily the same, but I thought that I would accumulate money at a rate well above the average and and and and we decided that we would live well, we never denied ourselves anything, it meant independence, to be able to do what I wanted.

I wanted to do and and and and then I felt that one way or another I would return to society now I thought my wife would outlive me, she was a little younger and women live longer than men and she loved the real process of Seeing people with problems, the money would help and I love it, I love the game she was in so I thought we wouldn't know, we would basically build it up and she would do the distribution and she did a lot. while she was alive, but the large amount of money was going to arrive later and then she died while I was still alive and then I had to make a decision on how best to spend this money in a smart way relatively quickly, uh, me too.

I came up with the idea of ​​splitting into five foundations, the largest of which is the Gates Foundation, which was four years ago, and I couldn't be happier with the decision. I haven't denied myself anything, I mean, I eat everything I want, I travel. place where I want you to have denied society something that capital, if you had continued to use it, could have done more good in good companies. Berkshire still exists. I'm still managing it, I mean, I'm doing, I'm doing, I'm doing. It's still for charities, but I'm also doing it for a lot of other people, you know, so I didn't have to give anything up.

You didn't even know I didn't have to give up what I love to do. every day I didn't have to give up any material thing in the world and my three children are each involved in a foundation that allows them to invest money in their energies and no, I think it really worked wonders for me, I mean, it's It's a perfect solution and you know, when my wife was pregnant, I didn't think I was going to give birth to a baby, you know, and you know, if I have a toothache or something, I don't pull my tooth out.

I turn it over. I follow Adam Smith's advice. You know, I hand it over to a specialist and there's no reason to think that because I'm good at making money I would necessarily be the best. Distributing it. I want certain goals in terms of how it's distributed, but I. I'm perfectly willing to hand it over to people who are going to spend their lives specializing in it. I want it done promptly and I want it to be in sync with the type of things I want. I want to support, but I don't think I have to do it myself now, in terms of that, many times the Foundation is established and goes in a different direction and there is a thing called Parkinson's law that says that the organization becomes self-centered in itself and forgets its purpose.

It was created because I see it all the time and you see it in businesses, that's why many times they go bankrupt, but in foundations you see it, so you made a provision that that was not going to happen with your funds, they had to be those monies. I had to be employed within 10 years 10 years after my status was completed, yes, and then all the money has to be spent, it can't go to institutions that in turn put it in their endowment fund or anything like that . I want people I know. and I know that they are in sync with me and I know that we will be faithful to certain ideals.

I want them to do without it because who the hell knows in 50 years, you'll know when the place will become a big institution, what will happen, people will rationalize then. that what's good for the institution is exactly what old Warren thought he knew 40 years ago on his deathbed, so I've seen that happen far too often and, uh, uh, now that the foundations are untested by a market system, I mean, if you have a business idea and you have music that is being tested by a market system if people will make a decision about whether the next album is good and they will make a decision, you know, about whether Coca-Cola still keeps them happy and all that.

That kind of thing, a foundation doesn't have a market test, so it's very easy if there's no market test, as people can find out in government and other places, it's very easy to start rationalizing things that are very far from what people originally thought it was establishing. to do and uh you were in terms of uh you're starting to look at charities and uh you have a very unusual uh scholarship fund Sean Carter Scholarship Fund describe it and where do you think you see it going, yeah, to me Yeah, uh uh, the reason. Why I focused on it was because such a small thing changed my life, right, a sixth grade teacher said you know what you're kind of smart and I, I and I believed her, she said I'm smart, so she gave.

For me that kind of opportunity, she kept the idea in my mind, so that's why the first thing I do is the fun of the scholarship because there are a lot of very smart kids that are coming out of these urban areas that can get to the end if given the chance. opportunity and um so it's a challenge that I gave my mom and my mom is so involved in it that she gets on the bus and takes these kids to their um um to

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them at colleges and you know now we're starting. watching kids graduate from college and you know that kind of feeling, you know when it's real, you know, I'm not sitting at home writing a check and you know, for whatever reason, to feel good or something, it's something that I really want to do. and I'm really interested and excited, so, it's effective philanthropy, in other words, sure, I mean, yeah, I'm seeing results.

I'm looking at, you know, we have our first Shan graduates. The Cara scholarship program, which for me is the best thing there is and, this seems like a contradiction when you think about Commerce, is to satisfy the needs and desires of others, you give them the music, people like it, you do it well, they get more pleasure from the investment. gives back to good companies and, but still, in philanthropy, if you think about it, it's almost the same opposite side of the same coin, meeting the needs and wants of others, a little bit different way of doing it, but again, as you say , it's not just about writing a check.

It's making sure you're actually delivering what you're supposed to deliver correctly. It's also harder than business. Because you're looking for easy things to do in business. I mean, you're looking at, you know, people like to drink Coca-Cola for 100 years. I'll probably like it for another hundred years; It doesn't take a lot of grain power to solve that kind of thing, but in philanthropy you're often fighting, you're tackling society's toughest problems. address address things that people have applied money and intelligence to before and they haven't really solved the problem. I mean, education is a great example, so you're really taking on things that you're not going to be successful at every time and you like to be successful every time.

Time is what you know you have to get, you have to adapt to that, if you are successful 100% of the time in philanthropy, the projects are too easy and you have to look for things that are important and in which you can fail. uh right now Gates is working to eradicate polio. They have already made it 99% of the way, but the last% is very difficult and no one knows for sure if it will be achieved. You know, we did it with smallpox in the past, so it's a different mentality, uh, uh, and you don't get the same feedback that you get in business right away, that also gets to something universal, learning from mistakes, one of the things you do in your annual report that has become a classic is thatyou'll discuss what went wrong as Dexter and what you learn and what you learn from that sure is difficult, difficult to do well, it's very important to recognize this, I mean, if someone goes, but turns around and says You know, I never made a mistake, I mean, you stopped listening to them, you know they're in a dream world, so face it, it's a bit like in terms of discussing topics you should be able to discuss. the other's position as well as you can argue your own, so that's part of thinking well and certainly part of making good decisions in business is recognizing the bad decisions you've made and why they were bad and and that doesn't mean that never do the same thing, I mean, because it was a strange situation at times, but I've made a lot of mistakes.

I'm going to make more mistakes, uh, but you know, bab Ru struck out a lot. The name of the game is that you do it, you don't want to expect perfection in yourself, you want to strive to do the best you can, but it's too demanding to expect perfection in yourself and it's good to recognize them and not start trying. He goes around joking with people about how to spread the message. You've made a very high profile file to spread the message, giving why and where you think it will take you and then I want to ask Jay, a very different audience, how.

Can you spread the message about the importance of philanthropy and helping people so they can have the opportunities you had? The way I got the message across was to get a copy of Forbes, look at that 400 list, and start making phone calls. Thanks, Bill Gates and Belinda did the same and we've only called about 80 people so far and some of them may know that others may not know. And surprisingly, we've gotten a much better reception for some. To what extent did we give the mine a high rating, as they say in the mining business, so we chose people in many cases, but not in all cases, where we knew they had a fairly strong philanthropic interest, but it was very discreet and we simply asked them if they would sign a non-legal but moral commitment that they would donate at least half of their net worth during their lifetime or upon death, and about half of the people we called, maybe a little more than half , they have said that they would be delighted and we have asked them to tell their own story and the stories are fascinating.

I mean how people came to that decision, how they evolved, how their family was involved in it, how maybe personal experiences shaped that, but it was really very encouraging, I don't think you'll find that in any other society in the world. other than the United States and we'll see how far it goes, but if it will go further, even if it only went as far as it is. gone, it will have an impact, uh, look, so you think that even though even those who were giving now are in effect and their minds are improving it. I think certainly in some cases.

I know that's the case and the very act of getting involved and spending more. time to think about it, talk to your family more about it, I don't think it's ever necessary to reduce donations and I think sometimes it's good, I've seen examples of this here, the most interesting thing will be if it leads to smarter donations with the Time, we hope to get this group together once a year and talk again about the mistakes, but then do you see the same kind of entrepreneurship that we see in business in philanthropy? It means there are a handful of large organizations and except for Habitat for Humanity and a couple of others, they have been around for decades, yes there are some that are harder to evaluate, it's not a market system, I mean you can't publish a profit and loss statement at the end of the year and you can't believe in measuring quarterly results in business, but the timeline for many things is much longer in philanthropy, so it's not as easy a game for me as business, but it's an important game and just because you can't do it perfectly doesn't mean you should stay on the sidelines and it doesn't mean you can't learn from others.

I will do that. I've already learned something from the three or four dinners we've had. and talking to people, but the stories are interesting people, they do things that are incredibly effective, they do things that fail for one reason or another, but I think we'll have smarter philanthropy in this country in 10 or 20 years. that we have now and I think that in some way this will contribute to it, so keep posting the list so I can melt it down. JJ will be in it soon, but Jay, in terms of philanthropy, you're obviously very focused on your business right now, since Warren was in his for a long time, but how can you get the message out to a different audience? ?

It doesn't even have to be dollars, it's time and what his teacher did by taking it and showing him another one. world or your mother, uh, emotionally connecting with your father in a way that you can move forward in your life and improve it, yeah, I think the first, the first step for us, because you know that, as far as artists are concerned , we are like the first generation that really capitalized on our talent for many years, you know, artists were dying of bankruptcy because the record company took advantage of them in some way to shape us, this is like that, really the first generation, I mean , Where we are.

I'm not talking about Rockstar I'm talking about Fin um so the first thing I think for us is to lead by example and show how these things have an effect on people's lives in a real way and um and tell. that story of this is the neighborhood that made me and I know that there is a future generation of stars in this neighborhood and that we should also help, you know, if given the chance, you know someone what someone can be if given the opportunity. The first thing is to show by example and then I'm going to slowly take a guy out like you know me and blow.

I think we could have done more. I think we could have visited and been there closer, but we've made a big commitment to uh, you know, Katrina, together, you know, we, you know, when we did that front United uh and made a donation together, it showed hip hop that kind of power, how we can come together and do these kinds of things, so again. The first thing is to do it by example and show how it works and show the example that you know how opportunities change people's lives and you know we move forward from there and we look both forward and backward, when you think about certain people from the past like philanthropy Andre carnegi big steel Steelman first

billionaire

but big Public Works libraries uh Warren 50 100 years from now when people say Warren Buffett what words handful of words come to mind I'll probably say burshire out of the way I hope it is I'm still around here I have to do it very well too, if not, I will come back and do it now.

You know, what I've done hasn't been very complicated or I've followed someone else's teachings and I really hope that if you could choose one word, it would be teacher. I mean, I have a huge amount. I mean, Jay is talking about his sixth grade teacher. I think almost everyone who has been successful has had a teacher, maybe not a formal teacher. I mean, can you tell? He may be a parent, obviously, but someone had a teacher that affected them and and if you can convey that, uh, I think that's better than money, actually, Jay, like, man? um, because in some ways you're a pioneer, yeah, I think that's a lot.

I hope to inspire, like I guess Obama already took this, but you know, just the hope of knowing how far we can go with the hope that you know if you really try hard and stay true to who you are, you know how far. you can come from where you come from, you know because my kind of success, I mean, where I come from, it's like Jay is teaching all the time, I mean, he's teaching in a much bigger classroom than I'll ever teach and it's You know it's important, I mean, they'll learn from someone. You know a young person who's growing up and you know he's a guy to learn from, so I just hope you know, I hope.

I think that's crucial, especially when people start to recognize that it does. You are a fantastic artist, but unlike artists of the past, you also knew how to take control of your destiny by learning about business, learning about distribution, all aspects of production, so that you didn't lose what you created, very good, thank you . you thank you thank you