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Warren Buffett’s Simple Advice to College Students

College campuses are filling up across the country as more than 20 million students get ready to start another semester. And it turns out Warren Buffett has one piece of advice about the best investment those students can make.

The important question
At the 2008 annual Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) meeting, Buffett was asked:

I teach at a community college in Florida, teaching students to invest in themselves. Financial independence and freedom. Slow and steady wins the race. Law of reciprocity, etc, etc, etc. What else should I be doing?

It's a sensible question. With so much discussion surrounding whether or not college is actually worth the money -- and Pew Research Center shows it clearly is -- and student debt loads climbing, it's natural to wonder what Buffett himself thinks of it all.

After all, the Wall Street Journal reported in March, "the only thing growing faster than the sticker price on a college education may be the debate around the value of one -- particularly if a student majors in something with no obvious pathway to a decent job."

But Buffett's answer may surprise you.

The honest answer
He replied honestly:

The most important investment is in themselves...I tell students that you get only one body and one mind. You'd better treat them the same way. It's hard to change habits at age 50 or 60...the best asset is your own self. You can become, to an enormous degree, the person you want to be.

College can so often be perceived as simply a time for fun and fun only. Consider that last summer the Huffinton Post ran 7 Fun Things You Have to Look Forward To In College, with the first three being, "Theme Parties, Greek Life, and School Spirit."

There was no mention of the knowledge which can be gained both inside and outside classrooms, the prospect of finding a major which leads to a fulfilling career, or any of the core benefits college offers. Instead it was only the secondary things that may be enjoyable, but are by no means the purpose of college. 

I say that not judgmentally, but just as a matter of fact. College is intended to be, and should be, a wonderful season of life. But at its core, it's one in which we learn the things to prepare us for our future careers and callings based on the gifts we're given.

Does that mean we should all be investors like Buffett? Of course not. He himself has said:

Never give up searching for the job that you're passionate about. Try to find the job you'd have if you were independently rich...Forget about the pay. When you're associating with the people that you love, doing what you love, it doesn't get any better than that. 

But what it does mean is that college must be viewed as a time to learn, to grow, and to better understand who we were made to be. Do students leave at age 22 and have the rest of their lives planned out? Maybe some do, but for many -- including myself -- that changes very quickly as the real world sets in.

As a result, those years spent on campus must be viewed principally as a season in which much can be gained that can in turn equip and prepare students for the rest of their lives. No matter what you study or where you find yourself, see college first as a season to learn and grow. You'll be glad you did.

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Read/Post Comments (6) | Recommend This Article (11)

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  • Report this Comment On August 18, 2014, at 12:05 PM, Tweenthelines726 wrote:

    Every college student should be given at least 1 share of BRK.B. along with their first tuition check. And tell them to read and accumulate the annual reports.

  • Report this Comment On August 18, 2014, at 8:08 PM, yardomd wrote:

    If you buy 2 BRK/B shares ($135 each today) every month, you may get 20% growth per year and have over $3,500,000 after 30 years. If you buy more, you would have more. $1,700,000 investment yielding 4% per year pays $70,000 per year. Same formula with $10,000,000 yields around $500,000 per year. Why waste your time on buying worthless luxuries. Where do you find $270 for stocks each month? You may select a lower mortgage/rent/car payment. Play with the compound interest calculator formula a little bit and you will get the idea.

  • Report this Comment On August 19, 2014, at 12:58 PM, RMengineer wrote:

    "Try to find the job you'd have if you were independently rich...Forget about the pay."

    People always say that. It's a nice thought but it's a disservice - especially in view of seeking _financial_ wealth.

    The thing is, to the extent that you want to get a good paying job, people don't pay you for what _you_ are passionate about, they pay you for the _value_ to them of the work you do for them.

    If the work you do has little value to anyone else, they simply aren't going to pay much to do it, no matter how passionate you are about it of how "fulfilling" you find it. If you want someone to pay you a lot of money, you have to what _they_ value highly.

    Now, it may be that you might want to find some balance or trade-off between high pay and what you find fulfilling. But focus on your passions and ignore what is of VALUE to others and then be surprised when what you do doesn't command good pay because you forgot to consider what is _valuable to others_ in your calculus.

    That that pleasing notion of following you passion ignores that fundamental economic fact, it is a disservice in helping people find a rewarding career. Sure _one_ component to a rewarding career is finding fulfillment, but no one _else_ is going to pay you just because _you_ feel fulfilled - "fulfillment" doesn't pay the rent or put food on the table.

  • Report this Comment On August 20, 2014, at 10:39 PM, borracho wrote:

    @RMengineer - Good point but I would prefer to listen to Buffett and those who have made it successfully vs. someone's comments on an internet board as he DID follow his passion

  • Report this Comment On August 21, 2014, at 9:17 AM, esbita wrote:

    @borracho - at a previous job I helped implement a QA program, which required the time of some rather expensive consultants. The consultants were Indian immigrants. They had college-age children and at a lunch break the conversation turned to what they told their children and a bit about the consultants' view of their own work.

    They admitted that their line of work was extremely dry and boring- but they learned to live with the work and find what fufillment they could, knowing that they were making a (relatively) honest living and a decent paycheck. They, and many other immigrant parents, teach their children the same thing. Study in college to get a marketable skill; personal fulfillment can be on your own time. Finding fulfillment isn't mandatory, but making your own way IS.

    You find the children of immigrants getting their CPA, a medical or nursing degree, or becoming an engineer or actuary. You don't find as many of them majoring in fluff degrees. Some of them may be talented artists or musicians, but their parents taught them pragmatism.

    The philosophy that the management consultants expressed was a stark contrast to the "work in what you love" philosophy I heard growing up. Those of my classmates who followed it ended up in fulfilling but *very* precarious positions. Buffet's skill and passion was in a field that actually makes money. RMengineer pointed out that this isn't true in many cases. If your skill and passion lie in the medical field? Great. Engineering? My husband was born to be an engineer and loves his job. Good for him. But music education? My friends in that field are splitting their time between multiple schools and are biting their nails when their contract is up for renewal. My dad was a pharmacist. No passion for the work; he trained as such so he could support a family in a decent manner. As for the rest of us? We find some balance between what we are good at, what we can tolerate, and what can pay us a living wage.

    Many of the jobs that people would want to do if they were independently wealthy aren't particularly stressful. There is either a sucky business model or none at all for making the job actually pay. Lots of people want a low stress job so the market for them tend to be glutted. That's We're doing our kids a disservice by pretending it isn't so.

  • Report this Comment On August 21, 2014, at 3:35 PM, 2subarus wrote:

    This can be sound advice. I was a practical person who wanted to be independent and self-sufficient, but I also was a talented artist, who decided to go ahead and major in Art in early 90s, even though there wasn't a clear career path. I was also good at math, but not to the level of an engineer. After graduation, I was perplexed as to what to do, but it just so happened, living in the bay area, video games were becoming much more in need of artists, and those who could also understand technical aspects, and communicate with engineers had a real leg-up. I landed a job and learned everything on the job, and trained myself on new software all the time. I entered through an open door of an industry in its infancy. It seemed risky at the time to major in art, but I was a well-rounded artist who then was able to leap into this new industry and find my way. I also saved $ and invested. Which is why I can afford to be a stay at home mom now for a little while. Lesson being, a new industry can pop up over night. I'm so glad I nurtured my best skills and talent, and the perfect opportunity presented itself to me.

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Patrick Morris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

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