Warren Buffett (WEB): Well, I look for people a lot, and the biggest thing I look for is that they have a passion for whatever they’re going to do. And if they aren’t really excited about it then it probably isn’t going to work that way. But if they’re enthused- they jump out of bed in the morning thinking about it- and they have fun doing it, they’re going to succeed in the job. You just can’t miss.
Girl Scout: What is your best advice for a new investor?
WEB: For a new investor? Well, I would do a lot of reading before I invest. In other words, I would prepare for it. I wouldn’t just jump in the water; no, I’ve got to know how to swim. So I did a lot of reading. I read every book the public library had about investing by the time I was eleven. You’ve got plenty of time, you’re young, to invest, so why not go in prepared instead of learning as you go along? You will learn as you go along. That comes with investing. But it’s better if you’ve done some thinking about it and sort of take your time getting into it. Because you’re not too young to start preparing for it at all.
Girl Scout: How do you know which non-profit organizations you’re going to give money to?
WEB: Well, the best thing to do is give to the ones you’re interested in. There are all kinds of good things to do- like girl scouting. But there’s all kinds of things that are helping people. And you want to get tied in with people you think will really get the job done. They can stick a name on anything, but it doesn’t necessarily mean that they’re going to do what they say. You want some place that’s effective, so you want to go out and look at what they really achieved. You still want to go down the grain of what interests you. I mean, you’ll all grow up and had a great experience in girl scouting, so you may decide that that’s a particular interest of yours. Other people- it may be their church, it could be their school, all kinds of things. And the important thing: it’s important to you personally, which one you choose. But there’s no one that I regard as a “ten” and another one as an “eight”. The one that does something and does something for you and really grabs your interest, as well as your money.
Girl Scout: What financial suggestions do you have for college students?
WEB: You have your parents first (laughs), make it as painless for them as possible. But the biggest suggestion I have is to avoid credit cards. I get letters every day, lots of letters every day, from people that have financial troubles. And it comes about from three things: one is losing their job, the other is some kind of terrible illness that hits them by surprise. But the third thing is credit cards. Interest rates are very high on credit cards and sometimes they’re 18%, sometimes they’re 21%. If I borrowed money at 18 or 20 percent, I’d be broke. I can’t make a living by borrowing money, ten thousand dollars a head, and nine or ten thousand dollars in a hole is night and day. With credit cards, it’s very easy to get in the hole and the interest charges compound and finally, you’re just in too big a hole to dig your way out. So if I have one piece of advice for young people, generally, it would be just to avoid credit cards.
Girl Scout: I read that you bought your first stock when you were thirteen and I was wondering, do you know what that stock was and how much it’s worth today?
WEB: Actually, I bought the first stock when I was eleven. It was in 1942. Maybe I lied about my age, I don’t know (laughs). I actually had to do it through my dad because they wouldn’t take an order from a minor. It was a company called City Service Preferred. I bought it at thirty-eight and a quarter. It went down to twenty-seven. My sister bought some because I did, and she was very unhappy with me. We walked to school together and she kept reminding me that I hadn’t done very well buying this stock. And then it started going up, and it got up to forty. And it had been so painful when it was down at twenty-seven and so painful hearing about it from my sister, too, that I sold it. And then it went to about two hundred and ten after that. And it was a preferred stock, that’s what they called it, so it isn’t around anymore. But if I’d been a little more patient, I would have gotten off to a lot better start.
Well, let me ask you questions now (laughs). I’ll quiz you. What’s your favorite part about being a girl scout?
Girl Scout: All the different activities that you can go on and all the opportunities that it gives you.
WEB: And what are the most important ways that you help people?
Girl Scout: Our gold and silver and bronze awards, you help the community doing that. And also you help people when you go to camp and you always donate items to the different service projects they do.
WEB: And you make a lot of good friends too. The friends you make are enormously important. The friends I’ve had…I try to be friends with the people are Dairy Queen, you know, big helpings.
Here is another Youtube video featuring Warren Buffett selling a mattress. I knew Buffett always had an aspiration in an acting career, what I did not know is that he is THAT GOOD!
Enjoy and thanks Ravi Nagarajan of www.rationalwalk.com for the tip.