Warren Buffet’s 20-Slot Rule: Simplify and Maximize Your Results

Warren Buffet's 20-Slot Rule: Simplify and Maximize Your Results | The Entrepreneur Review

At the University of Southern California, Charlie Munger took a seat in front of the audience and relaxed there for a while.

It was the year 1994 when Warren Buffet’s 20-Slot Rule formed and Munger had spent the previous 20 years working with Warren Buffett as the two men created Berkshire Hathaway into a firm with a market value of one billion dollars.

Munger gave a presentation at the USC Business School today with the title “A Lesson on Elementary Worldly Wisdom.”

Munger described an approach that Warren Buffett has used throughout his career with a great deal of success. This particular tactic was buried around midway through Munger’s lecture, amid many other good teachings.

Warren Buffet’s 20-Slot Rule is as follows: “Simplify, Yet Maximize Your Results.”

Here is Warren Buffet’s 20-Slot Rule:

When Warren gives presentations at business colleges, he often says things like, “I could increase your ultimate financial well-being by giving you a ticket with just 20 spaces in it so that you had 20 punches—representing all of the investments that you got to make in a lifetime.” And after you’d made the hole in the card, you were unable to make any additional investments under any circumstances.”

Warren Buffet's 20-Slot Rule: Simplify and Maximize Your Results | The Entrepreneur Review

He adds, “If you played by those rules, you’d have to put a lot of effort into what you did, and you’d be compelled to focus on the things that you’d given the most consideration to.” Therefore, you would do considerably better.

Again, I believe that this is a principle that is completely self-evident to everyone else. And this is something that makes total sense to Warren Buffet’s 20-Slot Rule. However, this is one of the very few business seminars offered anywhere in the United States where anybody will be stating that this is the case. This goes against the received knowledge in every way.

It seems evident to me that the winner has to place their bets with great discretion. It has been abundantly clear to me ever since I was a very little child. I don’t see why a very large number of other people don’t see it that way.

The Importance of Selective Focus, Which Is Often Overlooked

Warren Buffet’s 20-Slot Rule which was developed by Warren Buffett is not only beneficial for monetary investments, but it is also an effective strategy for time investments. In particular, the aspect of Buffett’s plan that drew my attention was his recommendation that investors “force themselves to load up” and commit their whole portfolio to a single investment.

The essential point is as follows:

When you are required to focus all of your energy and attention on a smaller number of tasks, the likelihood of your accomplishment increases.

Warren Buffet's 20-Slot Rule: Simplify and Maximize Your Results | The Entrepreneur Review

If you want to genuinely master a talent, you will need to be picky with how you spend your time in order to achieve this goal. If you want to create a place for great ideas, you have to get rid of decent ideas in a brutal manner. You have to zone in on the most important few things and dismiss the rest of the distractions. You need to make a commitment to working through a period of ten years of quiet.

Simplify, and then Give It Your All

If you take a glance around, you’ll find that very few individuals genuinely “go all in” on a particular skill or goal for an extended length of time. This is something you’ll notice if you look at Warren Buffet’s 20-Slot Rule.

Most people prefer to “dip their toes in the water” and pursue a new diet, a new college major, a new exercise routine, a new side business idea, or a new career path for a few weeks or months before moving on to the next new thing rather than conducting thorough research and devoting themselves to a goal for a period of at least two years.

Because so few people have the perseverance to practice one thing for an extended period of time, in my experience, you can actually become very good in many fields and possibly even world-class with just one year of focused work. This is because so few people have the persistence to practice one thing for an extended period of time.

If you imagine that your life is a 20-slot punchcard and that each slot represents a period of concentrated work that lasts for a year or two, then you can see how you can enjoy significant returns on your invested time simply by going all in on a few things. This is because each slot represents a period of focused work that lasts for a year or two.

Warren Buffet's 20-Slot Rule: Simplify and Maximize Your Results | The Entrepreneur Review

The point I’m trying to make is that everyone has a “life punchcard,” and if we think about how many different skills we can acquire in a single lifetime, there aren’t very many spaces on that card for us to fill in. During your tenure on this little planet, you will only be dealt a limited number of blows. In contrast to investments in the stock market, your 20 “life slots” are going to be used up regardless of whether you like it or not. No matter what happens, time will pass.

Do not squander your next opportunity says Warren Buffet’s 20-Slot Rule. Take some time to deliberate and then commit one hundred percent to your choice. Don’t simply throw caution to the wind and go for it. Go all in. Your end outcomes are nothing more than a reflection of the effort you put in earlier.

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