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CHAPTER 5

THE IMPORTANCE OF CHOOSING THE RIGHT ROLE MODELS, TEACHERS, AND ASSOCIATES IN LIFE

I was lucky to have the right heroes. Tell me who your heroes are and I’ll tell you how you’ll turn out to be. The qualities of the one you admire are the traits that you, with a little practice, can make your own, and that, if practiced, will become habit forming.

—Warren Buffett

Good teachers, in any field, do far more than convey information; they pass along something of themselves.

—Peter Buffett

People who constantly strive to improve themselves usually have a role model. This is a crucial aspect in the journey of self-improvement. As creatures of comfort, we are reluctant to step out of our comfort zone, and we often lack the inner urge. Because many of us are motivated by examples, however, we come to realize that the drive to improve can sometimes be found among others—or, to be more precise, can be driven by others. Role models fill that position nicely, and having them in our lives is an indicator that we intend to embark on a path of self-improvement.

In his book The Education of a Value Investor, Guy Spier writes about the importance of find one’s role models in life:

There is no more important aspect of our education as investors, businesspeople, and human beings than to find these exceptional role models who can guide us on our own journey. Books are a priceless source of wisdom. But people are the ultimate teachers, and there may be lessons that we can only learn from observing them or being in their presence. In many cases, these lessons are never communicated verbally. Yet you feel the guiding spirit of that person when you’re with them.¹

Role models act as our motivational coach and as a source of daily inspiration in our lives. I have many role models, and every year, I discover new ones during the course of my journey. You may wonder how one learns from his or her role model. You need to read about the lives of these people, what they have accomplished over the years, and how they learned, and then learn from their experiences. Vicarious learning is valuable, as our personal experience and insight is but a tiny fraction of the total experience and insight of humankind.

Teachers open the door, but you must enter by yourself.

—Chinese proverb

The very instant when we come across our role model, we usually know it. The feeling we experience at that moment cannot be described in mere words; it can only be experienced. It is one of profound inspiration, motivation, and finding one’s purpose in life.

Certain things you can do, or questions you can ask, will help you choose the most appropriate role models:

• Look for the people who achieved results similar to the ones you are trying to achieve.

• Look for people who have struggled with the same problems that you have in your life and try to understand how they overcame them.

• Find someone whose life story is so inspirational that it simply uplifts you and motivates you.

• If you have trouble staying motivated or inspired, look for someone who, by their very actions, inspires you in a specific way.

• If you lack discipline, look for role models who have plenty of it and who teach others how to adopt their discipline and dedication.

It really is up to you. First, you should clearly define exactly what you are looking for. After that, you can more easily identify your role models. As the saying goes, “When the student is ready, the teacher will appear.”

No discussion of role models can ever be complete without mentioning our parents. Most of us have experienced the wide reach of their compassion. Years of daily care. Sleepless nights. Endless worrying about our well-being. Unconditional love. Moral support during tough times.

Always give time to your parents. We are so busy growing up that we often forget they are growing old. Parents usually don’t ask that we spend time with them, but recognizing need is part of what makes one a person of value.

It is a wonderful feeling to care for our parents. We have many ways to do this. Showing appreciation for little acts. Spending time together. Making small gestures of love and affection. This is all most parents want from us. It is what gives them great happiness.

My noble mother taught me the virtues of honesty, kindness, and empathy. My dear father constantly motivated me to push my limits and to improve. He has been a great friend, philosopher, and guide and has given me the greatest gift anyone could give: he believed in me. I would like to make a special mention of my late maternal grandfather, who taught me the virtues of hard work. His eternal words of wisdom to me during my early teenage years had a profound and lasting impact on my life: “There is no alternative to hard work.”

Throughout my childhood years, I was a weak student. I barely finished tenth grade. My scores were so abysmally low that it was a struggle for me to gain admission to a decent high school. It was only my subsequent awakening, driven by a major personal setback, that made me finally realize the virtues of hard work and determined effort, and that was the catalyst for my academic revival and professional career growth. And this is why I instantly related to legendary investor Arnold Van Den Berg’s life, when I read his inspirational words:

I always had this image of myself that I wasn’t very smart, and the way I did in school proved that I wasn’t. But: Once I realized that if you dedicate yourself and you commit yourself, you can learn anything. I will admit this: whatever I learn takes me three times as long as anybody else. But if I spend three times as much time as anybody else, then I’m equal. I can learn it, just give me more time, more books.²

Hang Out with People Better Than You, and You Cannot Help but Improve

In his 2002 shareholder letter, Warren Buffett, in his usual anecdotal way, narrated the story of Eddie Lampert. Eddie first lifted bats for the Chicago White Sox, and the White Sox went to the World Series that year. Later he switched to another team, and that team, too, won the title. And so on—wherever Eddie went, lady luck followed. While fame and fortune followed Eddie, Eddie didn’t believe in his special powers. According to Buffett, “Eddie understood that how he lugged bats was unimportant; what counted instead was hooking up with the cream of those on the playing field. I’ve learned from Eddie. At Berkshire, I regularly hand bats to many of the heaviest hitters in American business [emphasis added].”³

We all can learn a deep lesson here: to be a winner, work with winners.

One of Berkshire’s biggest strengths has been the group of managers running its subsidiaries and hitting home runs in the form of profitable growth with high rates of return. Many names come to mind: Ajit Jain, Greg Abel, Rose Blumkin, Gene Abegg, Tony Nicely, Ralph Schey, Chuck Huggins, and Stan Lipsey. Buffett and Charlie Munger’s brilliance was to let managers of high caliber and integrity run their own businesses and then to stay out of their way. Both Buffett and Munger often joke that they delegate at Berkshire almost to the point of abdication.

Nothing, nothing at all, matters as much as bringing the right people into your life. They will teach you everything you need to know.

—Guy Spier

Surrounding yourself with smarter and better people provides a great education. You gain firsthand experience of their thought processes, how they prioritize (if you want to know someone’s priorities in life, observe what they do between Friday evening and Monday morning), their value system, how they live each day, how they handle success and failure, and many other important things that textbooks cannot teach you. You get to experience a gravitational pull toward higher qualities.

It is better to be an average guy on a star team than a star on an average team. The former will be better for you in the long term; the latter is just an ego trip. For most of my professional and personal life, superior individuals made me feel uncomfortable. And so I would seek out people who made me feel like I fit in. This was clearly a wrong strategy. If you are the smartest person in the room, you are in the wrong room. It is wiser to be with better people and to be uncomfortable than to limit yourself to a mediocre circle just to feel comfortable. For instance, if it were not for the generous help and guidance of my smart investor friends and colleagues, then my personal portfolio would never have been able to perform as well as it did during the 2018–19 bear market in India. I give them a large part of the credit for my healthy portfolio returns to date and I hope to always keep learning from them throughout life. The people closest to you play an outsize role in your level of success or failure—so choose wisely. You are, after all, the average of the five people you associate with the most in your life.

Deserved Trust Is Earned

Of all forms of pride, perhaps the most desirable is a justified pride in being trustworthy.

—Charlie Munger

Trust lies at the heart of any relationship. In answer to the question “What is trust?” Jack Welch, the former chief of General Electric replied, “You know it when you feel it.”⁴ It is one of the simplest and best definitions of trust. We experience an echoing, anxious feeling when trust is not present. In such cases, we hesitate to take the next step. Conversely, when trust is present, we experience an open, connected feeling. Trust creates the foundation of all relationships, societies, organizations, nations, and our entire civilization. It is the oil that lubricates our entire economic and business system. Trust drives risk-taking, which leads to innovation and progress.

We build trust by being honest in our communications. By being authentic and sincere in both words and actions. By being transparent and admitting mistakes and sharing what we learn. By being reliable and fair in our dealings with others. Over time, as you build your network, put in your best efforts to constantly add value to others in your relationships and to build a seamless web of deserved trust (figure 5.1).

FIGURE 5.1 Being trustworthy.

Source: Behavior Gap.

In his speeches, Munger often lists reliability as one of the essential traits for success. He explains that, although not many people can learn something like quantum mechanics, anyone can learn reliability. If you dedicate yourself to being reliable, that alone can overcome many failings or disadvantages you may have. Munger often applauds McDonald’s for teaching millions of teenagers the importance of reliably showing up for work.

Woody Allen said that 80 percent of success in life is just showing up. Always reliably show up for the task entrusted to you. Never overpromise and underdeliver. Being unreliable will impair your career and friendships. If anything, underpromise and overdeliver. Trust is earned when actions meet words.

In his book, Pebbles of Perception, Laurence Endersen writes, “Our ability to choose is one of life’s great gifts. We are the product of our choices. Good choices come from good character, and a few good choices make all the difference.”⁵

Being reliable and trustworthy is one such choice.