This article is part of a series on strategies and hacks of self-made billionaire entrepreneurs. We divided it into eight parts: Charlie Munger, Warren Buffett, Ray Dalio, Jeff Bezos, Elizabeth Holmes, Steve Jobs, Reid Hoffman, and Elon Musk.
Billionaire Entrepreneur Strategy:
Generally speaking, there are two types of mistakes: those that are stupid and those that are ignorant.
Ignorant mistakes happen when you don't know better. Stupid mistakes happen when you do know better.
Stupid mistakes are the hardest to stomach because they're the easiest to solve. Yet people, especially smart people, make them over and over.
Warren Buffett and his 40-year business partner, Charlie Munger, don't attribute their success to raw intelligence or brilliant ideas. Instead, they attribute a large part of it to consistently avoiding stupid mistakes by religiously following basic tenets and ideas they know will work.
Talking about his and Buffett's strategy in his book, Munger states, "We try more to profit from always remembering the obvious than from grasping the esoteric."
To counteract the often negative influence emotions can have in investment decisions, Buffett and Munger use several checklists, including ones for investing, problem solving, and psychological biases.
They claim that using these checklists has been crucial to their miraculous 21.6 percent return on investment for four decades, which is double the market average.
More recently, checklists have been receiving well-deserved attention as a result of the Checklist Manifesto, written by Harvard Medical School professor of surgery, Atul Gawande.
In a fascinating study by the World Health Organization, 8 hospitals who adopted a 19-point checklist saw deaths from surgery nearly cut in half!
Billionaire Entrepreneur Hack:
Blake Goodwine has used a decision-making checklist to build his Lionize Media Group into a network of niche media sites with tens of millions of monthly visitors.
His problem-solving checklist, shown below, lays out the path to a successful business strategy, and counteracts any internal biases that impede him from reaching his desired destination:
"Even if this checklist helps you make big decisions just slightly better, it will change the entire trajectory of your life and business. It has for me," Goodwine says.
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