American business mogul, investor, philanthropist and Berkshire Hathaway CEO, Warren Buffett, is considered to be one of the most successful investors in the world. With a cumulative net worth of about US$72.6 billion, he is one of the five most wealthy people in the world.

Buffett is synonymous with business success and a household name for entrepreneurs around the world. Despite all his wins, he is known for his humility and timeless approach to work.

Here are 12 lessons in life and business we all could learn from Warren Buffett:

1.  When investing, do so in companies that hold a competitive advantage.

Buffett often speaks about his ideal characteristics when looking for companies to invest in. His tip is always to invest in durable competitive advantage. This could manifest itself in many ways, whether in pricing or the weight of a brand’s name. 

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”

2.  Set your own standards and goals to measure success.

Your standards and intuition are key. Every business manager needs to know firmly what they are setting out to do and how they will get there. Doubt is inevitable, but fear can give way to those who have confidently planned their actions. 

“You don’t have to swing at everything—you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!’” 

3.  Know when to hold out, and when to pivot your energy and resources elsewhere.

Failure is inevitable and should be something you can come to terms with. However constant failure can be an indicator of a bigger issue. As Buffett illustrates, it may not be the patching method but the boat itself. 

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

4.  A good reputation is worth more than any gold.

It is true that a good reputation will precede you. With the right network your name will be spoken in rooms before you enter them. In the world of business and investing, nothing is more valuable. 

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

5.  Stay ready instead of getting ready.

Economic fluctuations are guaranteed but uncontrollable. The only thing that can be controlled as a business owner is your preparedness when disaster strikes. Buffett famously said, everyone looks like a genius when the market is good. It is when the market is bad that innovators are born.

“Only when the tide goes out do you discover who’s been swimming naked.”

6.  Cash is King.

When the chips are down you don’t want your wealth to be completely wrapped up in assets. Buffet is a firm believer in holding a substantial amount of flexible cash on the balance sheets. 

 “Cash … is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”

7.  Consistency without patience will ensure failure.

Success has never come easy. In any person’s career there will be a number of trials between where you started and where you aspire to be. Buffett says to this, discipline and patience is everything. 

“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

8.  Carefully mind your expenses and do not overspend. 

Managing money can be one of the most challenging parts of business ownership. Most individuals have trouble overseeing their own personal finances. Scale that to the demand of a business and you’re in another ball game completely. Buffett says, short term sacrifice leads to long term gain.

“If you buy things you do not need, soon you will have to sell things you need.”

9.  When investing, think of stocks as a business.

Investing is not something that can be thought of lightly. Buffett believes an investment should be taken as seriously as buying a business. Before investing one should know the ins and outs of a company in the way they would their own venture.

“Never invest in a business you cannot understand.”

10.  Knowledge is Power.

As an investor, it is most important to invest in your mind. The more you know, the better you can gauge and analyze major choices. 

“One can best prepare themselves for the economic future by investing in your own education. If you study hard and learn at a young age, you will be in the best circumstances to secure your future.”

11.  A platform is a gift that should be used to positively influence.

Buffett has famously said that he will only be giving one percent of his wealth for his children to inherit. The remaining 99 percent will be distributed across a number of charities. 

“We have learned to turn out lots of goods and services, but we haven’t learned as well how to have everybody share in the bounty. The obligation of a society as prosperous as ours is to figure out how nobody gets left too far behind.”

12.  Monitor yourself in order to manifest smart habits.

It is clear that Warren Buffett has achieved such success because he practises habits that allow him to do so. Learning from situations and positively going forward to create the life and business he imagines for himself has solidified the longevity of his career. 

“The difference between successful people and really successful people is that really successful people say no to almost everything.”