Warren Buffett’s right hand man, Charlie Munger is quoted, “The first $100,000 is a bitch”. Warren Buffett made his first $100,000 in the early 1950’s when he was still an individual investor, compounding his capital 50% annually over several years.
I was talking to a passionate young microcap investor the other day, and I was giving him some advice based on my many failures over the years. We spoke about how I got started and my path to becoming a full time private microcap investor. I could tell he was starting to compare his progress to mine. My advice to him was to focus on the long-term and don’t’ compare yourself to others. This is easier said than done, myself included.
This week @awealthofcs shared an article illustrating Warren Buffett’s net worth from age 14 to the present. As with most people, I looked at the chart, traced over to my age (34) and saw $3.4 million. I thought to myself, hmmm, well that’s not too unrealistic. When I looked at the comments on the chart, many inquired what Warren Buffett’s net worth figures would look like adjusted for inflation (2015 USD). I decided to calculate Buffett’s inflation adjusted net worth and overlay it onto the chart:
I then stared at Warren Buffett’s inflation adjusted net worth at my age and felt totally inadequate. Comparing yourself to others and especially to the best performer ever in your skill/expertise is unhealthy. Don’t compare yourself to others. Compare yourself to yourself two years ago. View the greats as mentors. It took me a long time to realize this but don’t try to copy what your mentor does because you can’t. Learn how they think.