Warren Buffett is inspirational. Not only because he is rich. 😉 And not also because he may arguably be one of the greatest investors ever. But because he knows how to simplify things and prioritize using simple tools.
I was reading an article (link) where a small story is shared about Warren Buffett’s pilot. In this story, Warren highlights a very useful Rule of 5/25 – or you might call it Rule of 25-5 (whatever you want). Basically, it is a productivity strategy that can be used to determine priorities and desires in life.
The end result of doing this simple 5/25 exercise is that you will have a razor-sharp focus on your prioritized goals.
Sounds boring? I promise you it is not.
Just read the story about Buffett and his pilot first…
Few years ago, Warren went up to his pilot (supposedly named Steve) and jokingly remarked –
“The fact that you’re still working for me, tells me I’m not doing my job. You should be out going after more of your goals and dreams.”
Warren then asked Steve to list the top 25 things he wanted to do in the next few years or even his lifetime.
“Just jot down anything that comes to your mind – that is important to you and which isn’t currently a part of your life.”
Once Steve completed his list, Warren then asked him to review each item and circle the top 5 that were most important to him – the ones he wanted more than anything.
Steve was hesitant because to him they were all massively important. After all, that’s why he wrote them down.
But Warren insisted that he could only pick five. This would have effectively divided 25 goals into two lists.
So Steve spent some time with his list and after some deliberation, made five circles.
“Are you sure these are the absolute highest priority for you?” – Warren asked.
Steve was confident about his goal prioritization.
Warren now asked Steve when he planned to get to work on these top-5 and what his approach would be exactly.
“Warren, these are the most important things in my life right now. I’m going to get to work on them right away. I’ll start tomorrow. Actually, no I’ll start tonight.”
Steve went on to explain his plan, who he would enlist to help him and by when all these items would get done.
Now, once the Top 5 planning session was over, Warren asked
“But what about these other 20 things on your list that you didn’t circle? What is your plan for completing those?”
Steve replied confidently,
“Well the top five are my primary focus but the other twenty come in at a close second. They are still important so I’ll work on those intermittently as I see fit as I’m getting through my top 5. They are not as urgent but I still plan to give them dedicated effort.”
To Steve’s surprise, Warren responded sternly,
No. You’ve got it wrong. Everything you didn’t circle just became your Avoid-At-All-Cost-List. No matter what, these things get no attention from you until you’ve succeeded with your top 5.
So that was the end of the story…
Wasn’t Warren’s response surprising?
I think it was. But if you think about it for sometime, it makes a lot of sense…
Having 25 (or even more) goals simultaneously can weigh you down. If you try to address all of them at once, all you will end up doing would be nothing. There is no doubt that all 25 goals would be important for you. But having all of them in your head (in form of periodic task list) adds immense burden and takes up a lot of energy. It can overwhelm you and drain you out.
And haven’t we experienced this in our own lives?
When there is a lot to do, we get overwhelmed. Our productivity goes down. And we are unable to do more important tasks well.
Without priorities, almost nothing gets done. And when you prioritize, you can actually begin your task of achieving the prioritized goal.
I think we should thank Mr. Buffett for giving us this two list strategy for making goal prioritization so simple. Ofcourse its not easy, but its simple enough that people like you and me can at least do this exercise once.
And if you have doubts whether this 5/25 technique proposed by Warren Buffett works or not, then given Buffett’s success, I think he has an excellent understanding of how to spend his time efficiently. So we better listen to him. 🙂
And if you think about it carefully, it’s pretty easy to get rid of wasteful (material) things and habits. For example, one might have a habit of waking up late. I think its not that difficult to get rid of this habit if one is convinced about the benefits. Isn’t it?
Weren’t we able to rise up early in our childhood during exam times for mugging up lessons, revisions, etc.?
I am continuously trying to get rid of my habit of sleeping late (because of which I don’t feel like waking up early). But lets leave that discussion for some other day. 🙂 (By the way, I highly recommend reading this amazing post on benefits of waking up early.
But coming back to 5/25 Rule, its easy (in theory) to list down 25 things, choose 5 important ones and then just forget about the remaining 20 ones. But it’s very difficult to implement this in reality. I read a few more very relevant lines in this context here, which I quote in next few paragraphs…
It is hard to prevent using your time on things that are easy to rationalize, but that have little payoff. The tasks that have the greatest likelihood of derailing your progress are the ones you care about, but that aren’t truly important.
Every behavior has a cost. Even neutral behaviors aren’t really neutral. They take up time, energy, and space that could be put towards better behaviors or more important tasks.
This is why Buffett’s strategy is particularly brilliant. Items 6 through 25 on your list are things you care about. They are important to you. It is very easy to justify spending your time on them. But when you compare them to your top 5 goals, these items are distractions.
Spending time on secondary priorities is the reason you have 20 half-finished projects instead of 5 completed ones. Eliminate ruthlessly. Force yourself to focus.
The most dangerous distractions are the ones you love, but that don’t love you back.
Makes a lot of sense. Right?
I personally believe in minimalism and simplicity.
And an intended or (in many cases) unintended side effect of minimalism and ruthless elimination of non-essentials is specialization. And specialization works. As Charlie Munger (Buffett’s investing partner) says,
“Just as animals flourish in niches, people who specialize in some narrow niche can do very well.”
So if you simply do what everybody else is doing (which is not focusing on few things), you will end up achieving what everybody else achieves – which is nothing. Mimicking the herd invites regression to the mean. Nothing else.
I know what you are thinking. All this is fine. But I don’t have the time to do it right now. I will do it someday. And that someday never comes. In fact, Tim Ferris has said that someday is a disease. And that is so true!
So don’t fall ill with Someday now. Take help of Warren Buffett’s 5/25 Rule and the 4-Step Prioritization Process.
1 – Make a list of 25 things you want to do in life.
2 – Identify the top 5 (encircle in your list of 25)
3 – Start working on the top 5
4 – Never think about the other 20 unless you are through with top 5
Now I am pretty sure that this alone won’t make you a billionaire like Warren Buffett.
But doing this exercise will sort out your priorities. Eliminating the non-essential goals of life is one of the best ways to make your life easier and less stressful.
Do give it a try this weekend. Should be an interesting exercise.