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2002: What would Buffett teach high school seniors?
AUDIENCE MEMBER: I’m Lowell Chrisman (PH), from Phoenix, Arizona. I am retired and teaching in — seniors in high school. I wish they could be here to hear you today.
I’m teaching these people an investment course part-time. And the first class I went to, they asked me to teach them how to prepare for retirement.
I would like to know what the two or three things are that you would suggest that I include in this course.
WARREN BUFFETT: Well —
CHARLIE MUNGER: What the hell does Warren know about retirement? (Laughter)
WARREN BUFFETT: Yeah. We haven’t even thought about it.
Now, let me give you one suggestion for that group. I use this sometimes when I talk to high school — a bunch of high school seniors down in Nebraska Wesleyan, a few weeks ago.
Tell the youngsters in the class, they’re probably around 16 or 17, and if they’re like I was when I was 16, you know, I was only thinking of two things.
And Martin’s Aunt Barbara wasn’t going out with me, so I was down to cars. (Laughter)
I tried hearses, but that didn’t work. The —
And let’s assume, and I use this with — let’s assume a genie appeared to you when you turned 16, and the genie said, “You get any car you want tomorrow morning, tied up in a big pink ribbon, anything you name. And it can be a Rolls Royce, it can be a Jaguar, it can be a Lexus, you name it, and that car will be there and you don’t owe me a penny.”
And having heard the genie stories before, you say to the genie, “What’s the catch?” And of course, the genie says, “Well, there’s just one. That car, which you’re going to get tomorrow morning, the car of your dreams, is the only car you’re ever going to get. So you can pick one, but that’s it.”
And you still name whatever the car of your dreams is, and the next morning you receive that car.
Now, what do you do, knowing that’s the only car you’re going to have for the rest of your life? Well, you read the owner’s manual about 10 times before you put the key in the ignition, and you keep it garaged.
You know, you change the oil twice as often as they tell you to do. You keep the tires inflated properly. If you get a little nick, you fix it that day so it doesn’t rust on you.
In other words, you make sure that this car of your dreams at age 16 is going to still be the car of your dreams at age 50 or 60, because you treat it as the only one you’ll ever get in your lifetime.
And then I would suggest to your students in Phoenix that they are going to get exactly one mind and one body, and that’s the mind and body they’re going to have at age 40 and 50 and 60.
And it isn’t so much a question of preparing for retirement, precisely, at those ages, it’s a question of preparing for life at those ages.
And that they should treat the importance of taking care and maximizing that mind, and taking care of that body in a way, that when they get to be 50 or 60 or 70, they’ve got a real asset instead of something that’s rusted and been ignored over the years.
And it will be too late to think about that when they’re 60 or 70. You can’t repair the car back into the shape it was. You can maintain it. And in the case of a mind, you can enhance it in a very big way over time.
But the most important asset your students have is themselves.
You know, I will take a person graduating from college, and assuming they’re in normal shape and everything, I will be glad to pay them, you know, probably $50,000 for 10 percent of all their earnings for the rest of their lives.
Well, I’m willing to pay them 10 percent for — $50,000 for 10 percent — that means they’re worth $500,000 if they haven’t got a dime in their pocket, as long as they’ve got a good mind and a good body.
Now that asset is far, far more important than any other asset they’ve got, unless they’ve been very lucky in terms of inheritance or something, but overwhelmingly their main asset is themselves. And they ought to treat their main asset as they would any other asset that was divorced from themselves.
And if they do that, and they start thinking about it now, and they develop the habits that maintain and enhance the asset, you know, they will have a very good car, mind, and body when they get to be 60. And if they don’t, they’ll have a wreck.