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Businesses can succeed while still being ethical—just ask Warren Buffett

Buffett always considers 6 factors before making a business decision. And none of them have to do with making money.

Warren Buffett, billionaire, wisdom, strategy, financial investments

Warren Buffett speaking at the 2015 Select USA Investment Summit.

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TD Ameritrade

Warren Buffett isn't just rich. He's known for being ethical, straightforward, and wise. And also generous. Not just with his money but with his ideas.

Buffett straight up spelled out how he makes decisions on how to invest in and acquire businesses in a public letter sent to his shareholders. To be clear: His instincts and insights are what have made him such a rich man. And that's what he's sharing so openly with the world.

These are the six factors Warren Buffett says he considers when he's making big business decisions.

Maybe they could help the rest of us think through some tough decisions in our own lives? Let's see.


Maybe you, too, are investing billions of dollars. Or, uh, maybe not. But the day-to-day choices you have to make about life could be just as tough — and important. So let's see how his lessons could apply:

1. It's gotta be a big choice and a big win.

Buffett says he prefers to acquire "large purchases (at least $75 million of pre-tax earnings unless the business will fit into one of our existing units)." Aka, go big, go bold. Not everything has to be huge, but in tough times, sometimes doing the big, scary thing is how you reap the big, amazing reward.

2. The decision has to create value for you consistently and currently.

None of this "it'll pay off in the distant future" or "it just needs some elbow grease" stuff. Whatever you're choosing, make sure it's valuable and has concrete, real-life impact. Or, as Buffett says, the acquisition must have "demonstrated consistent earning power (future projections are of no interest to us, nor are 'turnaround' situations)."

File:President Barack Obama and Warren Buffett in the Oval Office ...commons.wikimedia.org

3. The decision will benefit everyone who's invested in it, and it won't leave anyone hanging.

Buffett wants "businesses earning good returns on equity while employing little or no debt," aka no one who's put time/effort/money/love into said life choice (or business move) will come out at the end with less than what they started with. Makes sense, right? Basically, don't screw people over with the choices you make. Have some heart and fairness.

4. Everything necessary for success should already be in place.

Buffett mentions that there must be "management in place" and that his company "can't supply it." Invest time and energy in things that are solid and have demonstrated reliability. That is, "don't build the ship while you sail it." Why? According to Buffett's logic, when making huge decisions, if the part that keeps makes the end result of your decision sustainable is already there, that's a very good sign.

5. The decision may be hard, but the terms should be simple.

Buffett wants simple businesses, saying — in his awesomely straightforward way — "if there's lots of technology, we won't understand it." Life isn't always simple and there's certainly a time for complexity, but the lesson here is a good one: If you're making a huge choice, don't overcomplicate it.


man sitting on mountain cliff facing white clouds rising one hand at golden hourPhoto by Ian Stauffer on Unsplash

6. The options are clear and available.

Buffett refers to this availability, basically saying that the company has to have a price on it already and that his firm doesn't "want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown." I take this to mean that the choice is a clear action. No negotiations necessary.

Bingo.

Now I'm not saying that this well-to-do investor has all the answers just because he has all the money, and I know it's a little out there to think of these investment acquisition tips as something you can apply to your own, non-billionaire life. But think about it. Fearlessness? Fairness? Preparation? These are some helpful themes we could all probably take a few lessons from.

So next time you're making a big decision, think about them. In a world where financial literacy isn't exactly the norm, looking at how financial greats make their decisions could be an interesting thing to try. Who knows? It might help you.

Photo by Eliott Reyna on Unsplash

Gen Z is navigating a career landscape unlike any other.

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Every adult generation has its version of a “kids these days” lament, labeling the up-and-coming generation as less resilient or hardworking compared to their own youth. But Gen Z—currently middle school age through young adulthood—is challenging that notion with their career readiness.

Take Abigail Sanders, an 18-year-old college graduate. Thanks to a dual enrollment program with her online school, she actually earned her bachelor’s degree before her high school diploma. Now she’s in medical school at Bastyr University in Washington state, on track to become a doctor by age 22.

a family of 6 at a graduation with two graduatesAll four of the Sanders kids have utilized Connections Academy to prepare for their futures.

Abigail’s twin sister, Chloe, also did dual enrollment in high school to earn her associate’s in business and is on an early college graduation path to become a vet tech.

Maeson Frymire dreams of becoming a paramedic. He got his EMT certification in high school and fought fires in New Mexico after graduation. Now he’s working towards becoming an advanced certified EMT and has carved his career path towards flight paramedicine.

Sidny Szybnski spends her summers helping run her family’s log cabin resort on Priest Lake in Idaho. She's taken business and finance courses in high school and hopes to be the third generation to run the resort after attending college.

log cabin resort on edge of forestAfter college, Sidny Szybnski hopes to run her family's resort in Priest Lake, Idaho.

Each of these learners has attended Connections Academy, tuition-free online public schools available in 29 states across the U.S., to not only get ready for college but to dive straight into college coursework and get a head start on career training as well. These students are prime examples of how Gen Zers are navigating the career prep landscape, finding their passions, figuring out their paths and making sure they’re prepared for an ever-changing job market.

Lorna Bryant, the Head of Career Education for Connections Academy’s online school program, says that Gen Z has access to a vast array of career-prep tools that previous generations didn’t have, largely thanks to the internet.

“Twenty to 30 years ago, young people largely relied on what adults told them about careers and how to get there,” Bryant tells Upworthy. “Today, teens have a lot more agency. With technology and social media, they have access to so much information about jobs, employers and training. With a tap on their phones, they can hear directly from people who are in the jobs they may be interested in. Corporate websites and social media accounts outline an organization’s mission, vision and values—which are especially important for Gen Z.”

Research shows over 75% of high schoolers want to focus on skills that will prepare them for in-demand jobs. However, not all teens know what the options are or where to find them. Having your future wide open can be overwhelming, and young people might be afraid of making a wrong choice that will impact their whole lives.

Bryant emphasizes that optimism and enthusiasm from parents can help a lot, in addition to communicating that nothing's carved in stone—kids can change paths if they find themselves on one that isn’t a good fit.

Dr. Bryant and student video meeting Dr. Bryant meeting with a student

“I think the most important thing to communicate to teens is that they have more options than ever to pursue a career,” she says. “A two- or four-year college continues to be an incredibly valuable and popular route, but the pathways to a rewarding career have changed so much in the past decade. Today, career planning conversations include options like taking college credit while still in high school or earning a career credential or certificate before high school graduation. There are other options like the ‘ships’—internships, mentorships, apprenticeships—that can connect teens to college, careers, and employers who may offer on-the-job training or even pay for employees to go to college.”

Parents can also help kids develop “durable skills”—sometimes called “soft” or “human” skills—such as communication, leadership, collaboration, empathy and grit. Bryant says durable skills are incredibly valuable because they are attractive to employers and colleges and transfer across industries and jobs. A worldwide Pearson survey found that those skills are some of the most sought after by employers.

“The good news is that teens are likely to be already developing these skills,” says Bryant. Volunteering, having a part-time job, joining or captaining a team sport can build durable skills in a way that can also be highlighted on college and job applications.

Young people are navigating a fast-changing world, and the qualities, skills and tools they need to succeed may not always be familiar to their parents and grandparents. But Gen Z is showing that when they have a good grasp of the options and opportunities, they’re ready to embark on their career paths, wherever they may lead.

Learn more about Connections Academy here and Connections’ new college and career prep initiative here.

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