Warren Buffett’s 25/5 Rule Has Been Debunked. Here’s What You Should Do Instead

Warren Buffett has more simple wisdom in one big toe than most of us have in our whole bodies.

Buffett once gave his personal pilot a powerful lesson on time management based on his own three-step productivity strategy, which has been dubbed as the “25/5 Rule”:

  • Write down a list of your top 25 career goals.
  • Circle the five most important goals that truly speak to you. These are your most urgent goals and highest priorities to focus on.
  • Cross off the other 20 goals you have listed that hold less importance. 

Since those other 20 goals are not urgent priorities, Buffett asserted that any effort invested in them robs you of focus and energy from your five highest-priority goals.

Makes sense and good practice for any busy entrepreneur, you would think.

Except it’s not really a thing. At least not an original Buffett rule he calls his own, as he actually never came up with it. He outrightly debunked it at the 2013 Berkshire Hathaway shareholders meeting.

When asked about the 25/5 Rule, Buffett explained that he and his business partner Charlie Munger are not disciplined enough to approach decision-making in that way. “I can’t recall making a list in my life,” said Buffett.

A legitimate (and better) Buffett rule to follow

Does the 25/5 Rule work? I’m sure it’s still useful for clarifying your goals and refocusing on the things that matter the most, whether Buffett came up with it or not. But a real, and better, Buffett rule trumps it all: The Buffett formula.

Buffett calls this famous formula the key to his success. It’s actually a rule that he follows religiously: Go to bed a little smarter each day.

He says, “That’s how knowledge builds up. Like compound interest.” In theory, the Buffett formula should give you an advantage over a lifetime, as it has for Buffett.

And the best way to launch it into daily practice is to do what Buffett does every day: Exercise your mind.

Buffett, who turns 90 next month, exercises his mind with a voracious reading habit that he attributes as the foundational tool to improve knowledge. He spends 80 percent of his own day reading, and he suggests that anyone hoping to achieve similar success should read 500 pages per day.

While few of us can carve out the time needed to crank out that many pages in a book, the point is to make whatever progress you can. Most of us can fit in 15 or 20 pages each day with some discipline, improving our level of knowledge in the process. 

Buffett knows that the mind is the most powerful weapon to succeed in business. To continuously grow yours as Buffett does his, choose to live your life by exercising your mind first.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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