BUFFETT'S BEST ADVICE - And You've Never Heard It! | Episode 103 - a podcast by Bryan Ellis - SelfDirected.org

What is the single most valuable piece of advice ever given by Warren Buffett?  A lot of what he says is utterly irrelevant for you and me as Self-Directed Investors, but this bit – which you’ve probably never heard before – is absolute GOLD.  I’m Bryan Ellis.  I’ll tell you what it is RIGHT NOW in Episode #103.

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Hello, members of SDI Nation!  I’m so glad to be back with you.

Last week was TOUGH, my friends!  I had one of those summer colds that really zapped a big portion of the week, and one of the things I missed most was getting to spend this time with you!  I say that totally sincerely, folks:  I feel like the luckiest man alive to get to do this show and to have your attention for a few minutes each day… so thank you for being such great listeners.

And a special shout-out is in order to a few specific listeners, who have recently left 5-star reviews for this show on iTunes.  They are:

Toliver5, who just discovered the show and has already listened to over 20 episodes… thank you, sir!

Ccy1189, who describes what you hear each day as “informative, inspirational and innovative!”

JV Crum III who describes the show as “in a class by itself”

And others including Phily M, Joel Boggess, Roy Chumley, Dr. Mark C and a whole lot more of you.  Folks, I’m so eager to share Buffett’s best advice ever, but I’d be remiss if I didn’t, with the utmost respect, ask you to consider stopping by iTunes to give this show a 5-star rating.  I’ll be so overwhelmingly grateful if you can.  Thanks so much!

Ok, so you regular listeners have a sense of my opinion of Warren Buffett.  On the one hand, the guy is an overwhelmingly successful investor in the equities market.  It’s simply undeniable.  His results have created substantial influence, and there is a lot to be learned from the man’s approach to investing.  His politics are shockingly simple-minded, but it’s easy enough to separate that from financial issues for our purposes.

Did you know that Buffett is a proponent of the S3 model of investing that I teach here on SDI Radio?  The S3 model is basically this:  Every single investment you make must be SIMPLE and SAFE and STRONG.  Now, Buffett doesn’t call it the S3 model… but that’s really what he’s doing.  In fact, maybe I’ll do a show that really details the striking similarities.

Nevertheless, it’s not investment strategy per se that is the most valuable advice he’s ever given.  Rather, it’s the “20-slot” concept.

It’s rumored that Buffett once said these words:  “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had twenty punches - representing all the investments that you got to make in a lifetime. And once you'd punched through the card, you couldn't make any more investments at all.”

Think about THAT, my friends.  Think about the ability to make an investment as a strictly limited quantity… a commodity in short supply that, once exhausted, can never be replenished.

Sure, that’s not actually true… or is it?  Actually… I think the real-life version of that rule may be far more restrictive than 20 slots, and I’ll tell you why in just a moment.

But what’s ABSOLUTELY true is that many self-directed investors – particularly those of us in America – have a fundamental weakness:  It’s the assumption that there will always be more.  There will be more money, or more opportunities, or more time.  There will be more economic stability, there will be more strong markets, there will be more health, there will be more days to our lives.  We believe there will always, no matter what, be more.

My friends, there’s a concept that is so important in the world of self-directed investing, but nobody talks much about it.  It’s the concept of STEWARDSHIP.  In truth, that’s what I would like for this show to be – the STEWARDSHIP show.  Alas, that concept is too foreign to most.

Let’s separate investing and stewardship, shall we?

Investing is about one objective, and only one objective:  Taking one thing, and making it into something more.  And that is a noble, praiseworthy objective.  Never, ever will you hear me denigrate the notion of investing.  It’s a good thing, an honorable thing and a necessary thing.

But stewardship is about something bigger than that.  Stewardship is a step above investing on the financial hierarchy.  Stewardship absolutely includes successful investing, no doubt about it.  Even the biblical parable of the talents shows that the 2 men who invested their talents and gained more were praised, but the one who simply protected the talent and did nothing to grow it was punished as wicked.  So, wise investing is a key part of stewardship.

But there’s more to it.  It’s a different perspective – a higher perspective.  Stewardship includes a few additional considerations including:

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