Not only is Warren Buffett one of the richest men in the world, he’s also one of the best communicators in the business community. His ability to distill a complex idea into a clever one-liner is legendary.
One of his funniest quotes was delivered during a 2001 speech at the University of Georgia. Buffett explained that the secret to a long marriage was finding “someone with low expectations.” Amid laughter from the crowd, Buffett explained that this philosophy also applies to his investment strategy.
Here’s why the Oracle of Omaha believes expectations are the key to successful partnerships of all kinds.
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Picking a partner
Buffett often draws parallels between personal and business relationships. He and his long-term business partner, Charlie Munger, talked often about how rarely they argued.
“I always say, the best way to get a good spouse is to deserve one. And the best way to get a good partner is to be a good partner yourself,” Munger said at a Daily Journal Corp annual meeting in 2017.
The Buffett-Munger partnership endured for 60 years, and Buffett has been a married man for 70 years of his life. His perspective on long-term relationships is definitely backed up by plenty of experience.
His advice about choosing a partner with “low expectations” is perhaps easy to misinterpret. Buffett isn’t suggesting that people settle for less when it comes to business or life partners — quite the opposite. Instead, he’s advocating for setting clear expectations early in any relationship to help it endure the test of time.
This pragmatic approach is at the foundation of many business partnerships that power the Berkshire Hathaway conglomerate. Buffett’s investment vehicle has spent over $167 billion acquiring 63 companies over the past century, according to company tracking tool Tracxn. Each acquisition is a delicate balance of expectations on both sides.
“I want my partners to be on the low side on expectations coming in,” Buffett said in his 2001 speech. “Because I want the marriage to last. It’s a financial marriage when they join me at Berkshire and I don’t want them to think I’m going to do things I’m not going to do.”
