Your $1,000,000 Asset

Your $1,200,000 Asset

Warren Buffett talks to high school students in 1999.

Listen to the first 6 minutes of this video. In it Warren Buffett discusses a teenager's most important asset. The entire video is 59 minutes in length.

Below is the math to convert $50,000 in US$

in 1999 to Canadian $ in 2019:

Adjust for inflation:

US $50,000 in 1999 is worth US $90,000 in 2023

Adjust for currency:

Canadian $ currently trades at US$1 = CAN $0.74
- US $90,000 / $0.74 = CAN $120,000

0:00 What is your big financial asset?

- Thought exercise: Warren would like to buy 10% of your financial future. He will write you a cheque today. From this day forward you are going to give him 10% of everything you earn.

- How much are you going to charge him? He thinks it would be very foolish for anyone to ask for less than US $50,000 (the video was shot in 1999). Adjusted for inflation and currency this equates to about CAN $120,000 in 2019. Buffett suggests this is the minimum amount a person should accept. Most of you would want a fair amount more than that and you would be right.

- This means that today you are worth $1,200,000. If 10% is worth CAN $120,000 cash today then, on a 100% basis, your potential is worth a minimum of $1,200,000.

- The biggest financial asset you have by miles is the value of your earnings power over the years. To secure your financial future it is way more important what you do with this $1,200,000 asset today than if you invest is stocks or bonds. The earnings power you get out of this asset is dependent on what you do in the next few years. This is what you should focus on.

3:00 Two things will hold you back from maximizing your potential:

- lack of education

- (bad) habits you develop

4:00 Hiring: Integrity, intelligence, energy

- integrity is key, in your control and tied to habits