A Hidden Cost Called Rented Suit Liability (Safal Niveshak)
Warren Buffett explained the idea of long-tail hidden costs in his 1985 annual letter
A man was traveling abroad when he received a call from his sister informing him that their father had died unexpectedly. It was physically impossible for the brother to get back home for the funeral, but he told his sister to take care of the funeral arrangements and to send the bill to him. After returning home he received a bill for several thousand dollars, which he promptly paid. The following month another bill came along for $ 15, and he paid that too. Another month followed, with a similar bill. When, in the next month, a third bill for $15 was presented, he called his sister to ask what was going on. “Oh”, she said. “I forgot to tell you. We buried Dad in a rented suit.
People vs. Companies (Morgan Housel)
Every business has three main stakeholders: Investors, employees, and customers.
Investors are easy to please, Mackey said. They just want to stock to go up.
Customers want good products at good prices with good service. Hard but simple.
Employees are another story. Their needs are endlessly complicated.
“If you don’t pay them enough they’re unhappy. If you pay them more, they’re still unhappy if they lack opportunities to advance. If you pay them a lot and give them opportunities, they still may hate their boss,” he said. Or their coworkers. Or their commute. Or they get tired of doing the same thing. Glimpses of satisfaction followed by a gravitational pull towards wanting something else.“
Every week I go through a ton of reading, these are the interesting content I found useful for this week.
I hope you will enjoy as much as I do.
If you enjoy it please share and comment your feedback.
Quote, I’m pondering —
“The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.”
— Warren Buffett
How Much is Enough?
Smarter, Not Harder: How to Succeed at Work
Courage to Be Yourself: E.E. Cummings on Art, Life, and Being Unafraid to Feel
How 10 Billionaires Surmounted Failure to Build Massive Empires
“How do you guys have time to manage money, between tweeting and writing and tv and radio?”
Enjoy and Have a Great Week End.
I will tell you in a single line.
Be ready to take advantage of the opportunities to succeed.
Here is a story from Charlie Munger on how to Succeed.
The combination of patience and opportunism is important.
Charlie had a great-grandfather who had a great influence on his life. This man was one of Charlie’s only ancestors who became rich.
He toldCharlie that you have to be ready to take advantage of opportunities to succeed. This is what they do at BRK. They are always ready.
You do not want to be timid when great opportunities arise.
It is kind of like how most marriages don’t work and you may have only one chance to marry the right person.
Naval is one of the greatest minds out there in public forum, he is a great reader, thinker. Here is a thread of tweet he shared recently which made a lot of sense on few important aspects of life like wealth, knowledge.
Here is the collection of the thread please read it and enjoy!!
- Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.
- Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.
- You’re not going to get rich renting out your time. You must own equity – a piece of a business – to gain your financial freedom.
- You will get rich by giving society what it wants but does not yet know how to get. At scale.
- The Internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.
- Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
- Pick business partners with high intelligence, energy, and, above all, integrity.
- Learn to sell. Learn to build. If you can do both, you will be unstoppable.
- Arm yourself with specific knowledge, accountability, and leverage.
- Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.
- Building specific knowledge will feel like play to you but will look like work to others.
- When specific knowledge is taught, it’s through apprenticeships, not schools.
- Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.
- Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.
- The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.
- “Give me a lever long enough, and a place to stand, and I will move the earth.”
- Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).
- Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.
- Labor means people working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.
- Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.
- If you can’t code, write books and blogs, record videos and podcasts.
- Leverage is a force multiplier for your judgment.
- There is no skill called “business.” Avoid business magazines and business classes.
- Reading is faster than listening. Doing is faster than watching.
- You should be too busy to “do coffee,” while still keeping an uncluttered calendar.
- Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.
- Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.
- Become the best in the world at what you do. Keep redefining what you do until this is true.
- There are no get rich quick schemes. That’s just someone else getting rich off you.
- Apply specific knowledge, with leverage, and eventually, you will get what you deserve.
- When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day.