Warren Buffett Made A Fortune In Wall Street Investments Through The ’20-Slot Rule’
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Billionaire investor Warren Buffett made a fortune through an investing strategy known as the “20-Slot Rule.”
Buffett’s lifelong Berkshire Hathaway partner Charlie Munger revealed that the Oracle of Omaha subscribed to the “20-Slot Rule.”
What Is The 20-Slot Rule?
During the 1994 commencement speech at the University of Southern California, Munger explained Buffett’s “20-Slot Punchcard Rule” investment strategy.
“I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches – representing all the investments that you got to make in a lifetime,” Buffett said, according to Munger. “And once you’d punched through the card, you couldn’t make any more investments at all.”
Buffett warns that only “three or five or seven” investments could bring wealth, but notes “what you can’t do is get rich by trying one new idea every day.”
“Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about,” Buffett reportedly told the USC students. “So you’d do so much better.”
Munger purportedly said, “To me, it’s obvious that the winner has to bet very selectively. It’s been obvious to me since very early in life. I don’t know why it’s not obvious to many other people.”
Why Does The 20-Slot Rule Improve Your Life?
Inc reported, “When you resist the distractions of chasing after things that don’t truly serve you and wholeheartedly direct your focus and attention to the things that do, you’ll reap the returns. It’s having the dedication to pouring your whole being into something long-term, rather than for a short season halfheartedly. When you do, you’re practicing the 20-Slot Rule and your odds of success will greatly improve.”
CNBC noted, “Buffett’s 20-slot rule can be applied to all aspects of life, and not just money, because what it really drives at is the importance of focus. And the billionaire has hinted at this advice several times in the past.”
How To Use The 20-Slot Rule
The 20-Slot Rule can be a powerful tool to help you maximize productivity and improve your life. As mentioned above, this rule states that you should focus your attention on twenty tasks at a given time. This means that instead of taking on more than you can handle, it’s better to take on fewer tasks and focus more intently on those few tasks. This helps to ensure that you are able to finish those tasks in a timely manner, without stressing yourself out.
Not only that, but the 20-Slot Rule can help you stay organized and prioritize tasks. By taking a look at your to-do list and dividing it into twenty slots, you can easily identify which tasks are most important and should be completed first.
By limiting the number of tasks you have to focus on, you can remain more focused and be more successful in completing them. This can help you become more productive and efficient overall. And, you won’t be a huge ball of stress, which is a nice added benefit.