According to Flint, Buffett said you need to put all your time and energy into those top five goals while avoiding the other 20 at all costs. When we focus on too many things at once, we're unable to truly master each thing.
5/25 rule is a productivity strategy that Warren Buffett uses to help his employees to determine their priorities and desires in life. It helps the employees to truly focus on their prioritized goals. And here's how it works…
Buffett invests only in companies he thoroughly researches and understands. He doesn't go into an investment prepared to lose, and neither should you. Buffett believes the most important quality for an investor is temperament, not intellect. A successful investor doesn't focus on being with or against the crowd.
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“Take a good look at the twenty goals you didn't circle”, Buffet said. “These are your avoid-at-all-cost items. They're what has the most potential to distract you. They eat away your time and energy and prevent you from focusing on what matters.
Write down a list of your top 25 career goals. Circle the five most important goals that truly speak to you. These are your most urgent goals and highest priorities to focus on. Cross off the other 20 goals you have listed that hold less importance.
But what's funny is that Buffett has achieved all of his success NOT by doing MORE than his peers… but by doing LESS!
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Create your own 'not to do' list
The rule is simple: Every 20-minutes, take a 20-second break and focus on something at least 20-feet away. Think of it as resetting your eyes and retuning your brain. If you know your eyes will be given a rest soon you will be more likely to focus steadily for the 20-minute bursts.
Spending time on a singular focus helps them get the important things done. Buffett spoke about the 5/25 rule in relation to career goals, but I think it extends far beyond that. We can attain the same results if we apply it to our health, relationships, and personal goals.
Gates' biggest asset is holding company Cascade Investment, which he funded with Microsoft stock sales and dividends. His stake in Cascade Investments is valued at about $29.9 billion, according to Wealth-X, and accounts for 22.4% of his wealth.
“The higher the risk, the higher the return.”
In other words, the higher the risk, the higher the return an investor would claim as compensation for taking the risk. So, when a low-risk investment is made, the return is going to be low as well and vice versa.
Because that's the first rule of investing: Know your risk tolerance. In any one year, your investments can go up from a few percent on up to 30% -- or even higher on occasion. That's not a problem. The issue is when stocks have a drop of the same amount in one year.
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