What is Warren Buffett’s 5/25 Rule & How to Apply it?

Warren Buffett’s 5/25 rule is the rule that empowers you to taste success earlier without getting overwhelmed by choices. Yes, you read it right. You cannot make progress and hit success when you are entangled in lots of choices and goals. Having yourself overwhelmed by such a mess of choices and goals leads you to waste your time. Therefore, it is important to make the right choices at the right time. How can you do that with ease? That’s where Warren Buffett’s 5/25 rule comes into the picture. 

Do you find yourself entangled in such a dilemma? And you want to sort things out real quick? Then a veteran investor has a rule for you. It will empower you to set your goals effectively. That said, keep reading to learn about and understand Warren Buffett’s 5/25 rule in the simplest words. Let’s dive deep and find out how the rule can help you transform your goal-setting process.

Warren Buffet

Before discussing Warren Buffett’s 5/25 rule, it is important to know who Warren Buffet actually is. Even though the majority of us know about the veteran investor and businessman, some people don’t know about him. 

Warren Buffet is among the world’s wealthiest and most influential people. He is also among the most successful investors of the twentieth century. Warren Buffet’s Berkshire Hathaway is also among the most successful organizations. The organization has approximately 400,000 employees. 

Keeping in mind such a remarkable success Buffet has achieved, it is quite obvious that a man of his stature knew how to set and prioritize goals effectively. Additionally, Buffet has also demonstrated on several occasions that he has remarkable emotional intelligence as well. In fact, he has been inspiring people and advising them to follow in his footsteps. That’s why he shared his 5/25 rule with us to set goals effectively and achieve success. 

Warren Buffett’s 5/25 rule

So what exactly is Warren Buffett’s 5/25 rule? 

Warren Buffett’s 5/25 rule came to the limelight following a discussion between Warren Buffet and his pilot Mike Flint. Flint was his personal airplane pilot and was serving him for ten years. Buffet wanted to help Flint excel in his career. One day, Buffet said to him;

“The fact that you’re still working for me tells me I am not doing my job. You should be out, doing after more of your goals and dreams.” 

Flint was surprised. Upon seeing him astonished, Buffet explained his 5/25 rule. The gist of the rule is to prioritize goals in order to achieve success in one’s life. It was Warren who introduced his rule and steps to follow.

Warren Buffett’s 5/25 rule – 3 steps

The following are three steps to apply Warren Buffett’s 5/25 rule.

1. Enlist the top 25 goals

The first step involves enlisting the top 25 goals of your life. Given the fact that goals may change during different phases of life, this step actually involves enlisting the top 25 visions.

2. Choose 5 most important goals out of the top 25 goals

This is also a simple step. What you have to do is think about the five most important goals of your life. You should be very conscious and thoughtful because you have to choose the top 5 from the top 25 goals. When Mike Flint was done with this step, Buffet asked him;

“Are you sure these are the absolute highest priority for you?” Flint was positive because he had chosen the top 5 goals very carefully and consciously. 

3. Stay focused on these top 5 goals and neglect others

This is the final step of Warren Buffett’s 5/25 rule. After choosing the top 5 goals, it is of paramount importance to focus only on these goals. What about the other 20 goals? They were also important, right? No, they are important but you have to neglect them and this is a must to achieve the top 5 goals. 

Buffet was sure about Mike Flint’s thinking. When he asked Mike what would you do with the other 20 goals? He replied;

“The 5 goals I have surrounded are the most important. Nevertheless, I will continue to work on the others intermittently since they are still important.” 

So you see, Buffet was right about Flint. The veteran knew he would still work on the other 20 goals as well. However, Buffet tried to make Flint understand by saying;

“No. It would be a mistake, Mike, to do so. Everything you’ve surrounded is on the list of things you must avoid at all costs. And this, whatever the goal. Until you really reach the first 5, you should not devote any attention to it.”

How to apply Warren Buffett’s 5/25 rule in your life?

Warren Buffett’s 5/25 rule is simple. What you have to do is choose the top 5 goals from the 25 most important goals. After that, you need to focus entirely on the top 5 goals. It is only possible when you won’t allow the other 20 goals to distract you. Now, how to apply Warren Buffett’s 5/25 rule in your life?

There is no absolute answer to this question. There are multiple ways to use the rule in your life. For example, you can reach the top 5 goals of your life by prioritizing them. Similarly, you can also extend this rule to empower you to achieve goals on a daily, weekly, monthly, or yearly basis. For instance, choose the top 5 tasks on a daily basis and spend your energy only on these tasks. Similarly, you can extend the rule to achieve weekly, monthly, or yearly goals.

What are the advantages of Warren Buffett’s 5/25 rule?

There are two main advantages of Warren Buffett’s rule.

• As you know, goal overload is overwhelming and causes frustration and stress. Conversely, if you focus only on the five most important goals, you can achieve them with ease. This is the main advantage of this rule.
• Secondly, it is important to understand that quality is important to achieve goals. It is not the quantity. And Warren Buffett’s 5/25 rule eliminates quantity in favor of quality. So, when you have a few goals to focus on, you perform well to achieve them. Thus, it is another advantage of this rule.