When was the last time you were offered an investment opportunity, or a new job, or a business deal, and you thought, "Why not give it a try?" Being freely open to all kinds of experimentation is the American Way--especially if you're an entrepreneur.
But this try-anything-once approach doesn't sit well with Warren Buffett. He has a completely different view of how serious people should make serious decisions. "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," he has said. "And once you'd punched through the card, you couldn't make any more investments at all. 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. So you'd do so much better."
Too often, he adds, investors take the same approach with their money, thinking, "I'll throw a little here and little there to see what happens." In farming or in investing, that will yield lesser results than if you take the time to learn which soil is best for your crops and plant them all there.
It's a smart approach to investing, and maybe to many other things in our lives as well. Consider:
1. You can only switch jobs so many times.
I'm all in favor of mid-life career changes and of people leaving jobs that don't make them happy once they figure out what they really want to do. And a little experimentation, especially when you're young, is a great way to figure that out more quickly.
But how many people have you known who've started out in one profession or job--often because their families wanted them to or because they needed to make a living and didn't have very definite ambitions--only to switch to another job after a year or two? And then another one, a year or two after that?
Trying new jobs is fine, but bouncing around without any real plan will create a drag on your career, whether you're working for a big company or creating a startup. So looking at each job you take or venture you start as if it were one of a limited number of steps you can take to achieve your goals is likely a very good idea. Look at it that way, and I think many of us would make wiser choices about where to work and where not to.
2. You can only start so many new ventures.
Of course, 20 seems like a very high number in this context. Most of us are limited to starting many fewer companies or major ventures than that by factors like available funding and time. So let's say it's a smaller number, maybe two or three. If you could only help create three startup companies for your entire life, how carefully would you pick those opportunities? And how much time would you spend learning everything you could about the products those companies sold and the industries they were in? And wouldn't you be likelier to beat the odds if you did?
3. You can only have so many relationships.
This may be a tough sell, but think about it. How many times have you started dating someone, telling yourself he or she just might be "the one," when all along you knew the odds were somewhere between slim and none? If you knew you were operating from a limited number of chances at love, would you still have gotten into those so-so relationships? I can think of at least a few that I'd have skipped, and saved myself some time and aggravation.
4. You can only have so many tries at self-improvement.
This may be an even tougher sell. And I have to admit, I'd resist making that commitment myself. I tend to read self-improvement books or take classes and pick up bits and pieces from them, keeping what works and forgetting the rest. Some things, like the pomodoro technique or this quick before-you-get-out-of-bed ritual, have become permanent habits. Others have gotten discarded along the way.
But I have to admit, there would be real benefits to a more limited approach. While you wouldn't want to be too constricted in your choices of things to try, you might make more thoughtful choices if you knew you had a finite number of them. More important, that commitment would likely motivate you to try harder at each one before giving up. And maybe that would be a good thing.