Warren Buffett talking
Source: Getty

How Warren Buffett's 5/25 Rule Can Help You Achieve Life Goals

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Sep. 20 2021, Published 2:16 p.m. ET

Warren Buffett is regarded as one of the most successful investors the world has ever seen. As a result, he has accumulated a huge fortune. In addition to donating his wealth generously to charities, the billionaire also likes sharing advice to help other people succeed in life. For example, he recommends investing in index funds and avoiding bonds. If you’re seeking success in a career, business, or any other area of life, you might find Buffett’s 5/25 rule valuable.

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Although rich, Buffett prefers to lead a simple life. You could view the Oracle of Omaha as a frugal billionaire. He still lives in a 5-bedroomed house he purchased for just over $31,000 in 1958. The billionaire doesn't think that owning many homes will increase his happiness. When Buffett goes for breakfast at McDonald’s, he doesn’t spend more than $4. He likes dining at Gorat’s Steakhouse in Omaha and prefers to keep his orders below $50.

Buffett’s advice to longtime pilot about achieving career goals

There isn't any doubt that spending less helps Buffett save more money. His fortune can keep growing and he can make a greater impact through philanthropy. When pursuing life goals, Buffett thinks that you stand a better chance of success if you focus on a few important goals instead of trying to do everything that interests you.

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warren buffett life advice
Source: Getty

One day, Buffett had a conversation about careers with his personal pilot Mike Flint. Buffett showed Flint, who had been flying him for 10 years, how he could achieve his career dreams. That involved taking Flint through a few steps that Buffett dubbed the “5/25 rule.”

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Warren Buffett's 5/25 rule: Step 1

People have many goals in life and the list can be long. Buffett advises that you write down your top 25 goals as the first step. Once you get the list down, review it with a focus on the top priorities.

Warren Buffett's 5/25 rule: Step 2

From the list of 25 goals, identify the top 5 priorities and circle them. That might be hard considering you’ve already whittled down your wish list to just 25 items. So, you need to carefully screen your list to select just a handful of the most important goals.

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Warren Buffett's 5/25 rule: Step 3

Put the top 5 goals on one list and the remaining 20 on another. Now it’s time to make the tough decision. Buffett advises that you dedicate your efforts to the top 5 goals and forget about the rest. Only return to the list of 20 after you’ve achieved everything on the top 5 priority list.

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Why Warren Buffett’s 5/25 rule is important

If you’re trying to achieve many goals simultaneously, you might be overwhelmed and fail. Instead, Buffett recommends focusing on a few important goals until they’re out of the way. Then you turn your attention to the secondary goals.

Although Buffett’s 5/25 rule came out in the context of discussing careers, it can be applied in many other areas of life. You could apply it in your daily routines to achieve the best outcomes without stressing so much.

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