Bill Gates and Warren Buffett agree: Focus is the most important factor in their success.
According to the Merriam-Webster dictionary, to focus is “to concentrate attention or effort." Billionaires like Bill Gates and Warren Buffett realized that in order to be massively successful, you must concentrate your attention in one direction — on one goal or project. While you may be able to build proficiency in several areas by multitasking, to truly become an expert in something, you’ll likely need to focus your attention on what it is you want to become an expert in.
Read on to find out how to summon your inner Bill Gates and Warren Buffet and use the trait of “focus” to be better at how to manage your money.
Warren Buffet and Bill Gates master one thing at a time
Warren Buffett is a man of extraordinary self-discipline. According to Warren Buffet biographer, Alice Schroeder, Buffet “ruled out paying attention to almost anything but business — art, literature, science, travel, architecture — so that he could focus on his passion.”
Why is this so important? In life and, well, pretty much any activity or task you take on, the focus you place on your goals needs to be unwavering if you want better than average results.
The same is true about Bill Gates when it comes to self-discipline. According to Walter Isaacson’s “The Innovators,” Microsoft’s co-founder, Paul Allen, said he and Bill Gates differed in their ability to focus:
"Where I was curious to study everything in sight, Bill would focus on one task at a time with total discipline," said Allen. "You could see it when he programmed. He would sit with a marker clenched in his mouth, tapping his feet and rocking; impervious to distraction."
Having the self-discipline to cut out distractions and focus on one task at a time allows you to concentrate your efforts, which can be much more powerful than giving a task only a sliver of your attention.
Focus is the secret to making millions
If you want to be successful at learning how to invest money and how to manage your life, you must learn to focus your efforts. Intelligence aside, when it comes to concentrating on one goal, do you have enough discipline?
Look at the world's largest companies. Each focused on building something amazing and different — something that stuck out from the crowd. Each was set on being the best at what it focused on. Apple focused on having the best designed electronic products. Google focused on having the best search results. Chipotle focused on having the freshest, best quality fast food.
Apple, Google, and Chipotle could have focused efforts in other directions. Apple could have tried to break into the search engine industry. Google could have tried to go after e-commerce like Amazon. Chipotle could have reduced the quality of its products to compete with other fast-food chains. However, each company remained focused on its original goal and that's why they succeeded.
While there are other factors that go into making enormous wealth, having an unwavering focus and concentrating on being the best at any given thing is what truly sets you apart.
How to use focus to make more money
When you become an expert in a field, people who need your skills and advice are willing to pay you for your time. Whether it's finding the best travel deals, posting to social media, or playing online games, there are opportunities for you to build your personal brand and skills into an endeavor that actually pays you for your time and efforts.
If this area of expertise isn’t your primary source of income, use your extra time outside of work to start building it. It might start off as a side hustle, but who’s to say it can’t develop into something bigger?
The important thing is to dedicate time and energy to developing this expertise, and just get started. If you’re the handiest person you know, you can build your brand with a platform like TaskRabbit. If you want to provide services for pets, you can start by finding clients with Rover.
As investor Peter Thiel noted in his book “Zero to One: Notes on Start Ups, or How to Build the Future,” you want to start with a small market.
"Businesses must start with especially small markets. Facebook started with just Harvard students — Mark Zuckerberg's first product was designed to get all his classmates signed up, not to attract all people of Earth.”
Even if you don't start your own business, your expertise can help you excel and make more money in your current role. Alternatively, your expertise can help you find another career, one that might earn you more in the long term.
How to use that money to become a good investor
As you start bringing in more and more money from your different side hustles, you’re going to have to decide what to do with it all. You could spend it, or you can invest your money to create long-term wealth. If you’re unsure where to invest your money, Warren Buffett recommends investing in what you know. Even then, becoming a good investor takes time and discipline.
According to the most recent Quantitative Analysis of Investor Behavior (QAIB) report, the average equity fund investor achieved a 4.88% rate of return over the 10 years ending December 31, 2017. A 4.88% rate of return might outpace the current rate of inflation, but is it enough to preserve your money through retirement?
Being an "average investor" is not going to cut it. But like the most rewarding things in life, investing takes time and focus. If you have a limited understanding of the stock market, you can get started with tools like Stash and Wealthsimple, and then build your investment knowledge from there. These platforms allow you to start investing without requiring lots of money or expertise and can be a great way to build your portfolio.
But to transform from a novice investor to someone who’s truly successful at investing, you need to concentrate on what sets these people apart. Average investors stay average because they lose focus and fall victim to these mistakes:
- They are tempted by hot "trends" and buy investments they know nothing about
- They trade too frequently
- They panic when the market drops
- They don't concentrate on their original goal (example: making rash short-term decisions for their long-term retirement funds)
- They start borrowing money from the wrong places, like their home equity
Warren Buffet focuses his efforts on industries he knows. Why not do the same?
The Gates-Buffet secret: focus on goals and ignore everything else
You can't know everything, and your time is limited. But can you do one thing right now to take a step in the right direction? Assess your income and investments and determine whether you’re focusing enough on each of them.
Just as Bill Gates and Warren Buffet, focus on one thing and become an expert at it. Find ways to monetize your expertise, though you want to keep your focus small at first. With the money you earn, invest it wisely. Invest in what you know. Understand what you’re investing in and let the powers of the market take care of the rest.