Top 10 Rules for Success From World's Richest Investors

Some of the world's richest investors didn't build fortunes by chasing the next hot stock. Warren Buffett focused on what a business would be worth years into the future.

90% of the people that buy stocks don't think of them the right way.

Jeff Bezos trusted his instincts when everyone else doubted him.

The biggest things that we've done at Amazon, a lot of them come from instinct and hunches.

Sam Altman built his career by recognizing opportunities before the rest of the world saw them.

This is the best time ever in the history of technology, ever, period, to start a company.

Bill Ackman protects himself before chasing bigger returns.

Ben Graham was about what he called— he invented this concept of margin of safety.

And Robert Kiyosaki believes wealth comes from owning assets instead of liabilities.

Cash flow are the two most important words in business.

So today we're breaking down the top 10 rules for success from the world's richest investors, featuring powerful lessons on how to think better, invest smarter, and build lasting wealth. If you want to make better financial decisions, grow your wealth over time, and play the long game, this video is for you. Need motivation?

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Okay, let's kick it off with rule number 1: Think like an investor with Warren Buffett.

I'm a bright guy who's terribly interested in what he does. So I've spent a lifetime doing it. I've surrounded myself with people that bring out the best in me. And you don't need to be a genius in what I do. That's the good thing about it. If I went into physics or a whole lot of other subjects, I'd be an also-ran. But I am in a game that you don't need— you probably need 120 points of IQ, you know, but you— But 170 doesn't do any better than 120. It may do worse, probably do worse. But you don't really need brains.

What do you need?

You need the right orientation. 90% of the people— I'm pulling a figure out of the air— but 90% of the people that buy stocks don't think of them the right way. They think about something that they hope goes up next week. And they think about the market as something they hope goes up. And if it's down, they feel worse. I feel better.

And you think about?

Pardon me?

And what do you think about?

I think about what the company's going to be worth 10 or 20 years from now. And I hope it goes down when I buy it because I'll buy more.

Well, number 2 is trust your instinct with Jeff Bezos.

If you're running any organization of any scale whatsoever, It is essential to have data and to rely on data.

Of course.

If you're not— that's so basic and so fundamental. But the data doesn't tell you anything— everything. It doesn't tell you everything. And so if, for example, it often doesn't tell you about changes or things that you're missing or things that you're not measuring properly. And so that's where anecdotes come into play. And that's where intuition and gut instinct and heart come into play. And a lot of those things are new. You know, the biggest things that we've done at Amazon, and it's going to be true in space for Blue Origin as well. It's true in AI. A lot of them come from instinct and hunches. Nobody, uh, uh, if you take Echo and Alexa, which has been a fantastically successful product for us, it's installed in hundreds of millions of endpoints. Nobody was asking for a black cylinder that's always on that you can talk to. And apps for music and to turn your lights on and off and set timers. And we didn't know if people would want that. You just have to kind of use your intuition. AWS, again, nobody was asking for that. We had to use our intuition. Third-party marketplace, you know, we're, we've been working on doing cloud computing in space at Blue Origin because Cloud, you know, there's a lot— you get 8 times as much solar power per unit of area in space as you do on Earth. And so in principle, you could make data centers in space that would be very efficient. So that's something that, you know, Blue Origin is working on. A lot of other companies are working on that. But that's not something you can be sure is going to work. You don't know what launch costs are going to be and other things. So technically it works, but there's a lot of mysteries about it too. I think when you're talking about invention, you have to be a wanderer. You have to wander because, you know, if you're not wandering, you're going in a straight line. That means you know where you're going. And a lot of the most important discoveries and most important inventions don't come from knowing where you're going.

Rule number 3 is seize the opportunities with Sam Altman.

First of all, assume you all are like starting startups or have started startups, think about starting startups. This is the best fucking time ever in the history of technology ever, period, to start a company. Um, yeah, this is, uh, and, but part of the reason it's the best is because like the ground is shaking and it's true. There are a lot of these challenges. So on one hand, you can look at something like that and say, we have been a, you know, SaaS company and now like all of the code can just be generated right in time when someone needs it. And what does that mean for us? Or you can look at it and say, wow, this is going to happen, but it's going to happen to everybody. And the way startups win is when they can iterate faster than big companies and they can do it at a much lower cost. Like, big companies have a lot of advantages, but they iterate very slowly. Um, and they, you know, if something is like very cheap, then a lot of their big advantages go away. So you can look at this, all of these problems one way or another, but the way I would recommend looking at them is everybody is going to face the same challenges and opportunities, but when the clock cycle of the industry changes this much, Startups almost always win, and we've probably never seen it change this much.

Rule number 4 is build a balanced portfolio with Ray Dalio.

We break it into 2 parts. We have 2 basic portfolios. There is the strategic asset allocation mix, which we call all-weather, and that just has nothing to do with bets. It has to do with how to make all the assets the same risk parity. I would call risk parity. The problem is when people try to diversify and they own some equities, and equities has a volatility, right, that's large, or they own assets that do well when the economy does well and do badly when the economy does badly, they have a concentration of their risk in, in some assets, right? They need to have— they need to change the portfolio. They need to buy longer duration bonds or leverage the bonds or bring up so that bonds and commodities and pieces have comparable impacts so that whatever happens in the economy will then, um, have a balancing effect. Because the one thing you could be most confident is that asset classes on average will outperform cash.

Okay.

So if you have— that's a strategic asset allocation. That's what the all-weather piece is. Then there's the bets. The bets are zero-sum, right? In order for you to beat me in the game You're going to— it's like poker. It's a zero-sum game. I have— we have 1,500 people who work at Bridgewater. We spend hundreds of millions of dollars on research and so on. We've been doing this for 37 years and we don't know that we're going to win. In other words, we work that— we have to have diversified bets. We have a lot of diversified bets and so on. So it's very important for most people to know when not to make a bet. 'Cause if you're gonna come to the poker table, you're gonna have to beat me. And you're gonna have to beat those who take money. So the nature of investing is that a very small percentage of the people take money essentially in that poker game away from other people who don't know when prices go up, whether that means it's a good investment or if it's a more expensive investment.

Right. Also, if you wanna take real action after this video, I made a free worksheet just for you. It covers the top lessons from today, gives you space to write your biggest takeaways, and helps you build a simple action plan It's 100% free. Just click the link in the description below to go grab it. I'll see you there. Rule number 5 is have a margin of safety with Bill Ackman.

Every consumer has a view on different brands and different companies. And you know what we look for are sort of these non-disruptible businesses, a business where you can kind of close your eyes, stock market shuts for a decade, and you know that 10 years from now it's going to be a more valuable, more profitable company. So we own a business called Universal Music Group. It's in the business of helping artists become global artists through the recorded music business. And it's in the business of owning rights to sort of the music publishing rights of songwriters. And I think music is forever, right? Music is a many thousand-year-old part of the human experience. And I think it will be thousands of years from now. And so that's a pretty good backdrop to invest in a company. And the company basically owns a third of the global recorded music. That's, you know, the most dominant sort of market share in the business. They're the best at taking an artist who's 18 years old, who's got a great voice and has started to get a presence on YouTube and Instagram and helping that artist become a superstar. And that's a unique talent, and the result is the best artists in the world want to come work for them. But they also have this incredible library of, you know, the Beatles, the Rolling Stones, U2, etc. So, and then if you think about what music has become— used to be about records and CDs and, you know, 8-track tapes for those of whom— and it was about a new format, and that's how they drive sales. And it's become a business which is like the podcast business, about streaming. Streaming is a lot more predictable than selling records. You can sort of say, "Okay, how many people have smartphones? How many people are going to have smartphones next year?" There's a kind of global penetration over time of smartphones. You pay, call it $10, $11 a month for a subscription or less for a family plan, and you can kind of build a model of what the world looks like and predict the growth of the streaming business. You predict what kind of market share Universal is going to have over time. And you can't get to a precise view of value, you can get to an approximation. And the key is to buy at a price that represents a big discount to that approximation. And that gets back to Ben Graham. Ben Graham was about what he called— he invented this concept of margin of safety, right? You want to buy a company at a price that if you're wrong about what you think it's worth and it turns out to be worth 30% less, you paid a deep enough discount to your estimate that you're still okay. It's about investing. A big part of investing is not losing money. If you can avoid losing money and then have a few great hits, you can do very, very well over time.

Well, number 6 is Know When to Take Risks with Kevin O'Leary.

You have to get to a place where you have $5 million in the bank because you can survive the rest of your life no matter what happens, and your family. You can take care of a lot of people making 6 or 7% of $5 million. When you make that, you have to set that aside and you don't risk it. And then after that, you can start to take risk capital and put it to work.

Rule number 7 is diversify with Tony Robbins.

The goal, if you own a business, and I would assume a lot of your viewers are business owners or, or getting started in business, no matter how good you are in business, think about this. The one universal rule that idiots in finance know is diversification. Mm-hmm. It's the only free lunch. You've gotta diversify because if you put all your eggs in one basket, no matter how good the basket is, One day that real estate market, that stock market, that bond market, that collectibles market, whatever you invest in, Ray Dalio showed me statistically, it'll drop 50 to 70% on a day. Now, if you're later in life when that happens, it's over for you. So you have to diversify, and yet most people, they know real estate, so they do it, or they know stocks, they do it, or they grew up with their parents flipping things, and it's the wrong thing to do. So you've got to diversify in order for you to be able to to truly succeed. And that's why when you own a business, yeah, if you put all your money in your business, which is what most of us do naturally, you put all your eggs in one basket and there's things that can happen. I mean, you know, you're— let's say you spent 20 years and you figured out how to put together the ultimate map, you know. And you remember Garmin came out with this thing called the TomTom. I don't know if you remember, used to put on your— are you old enough to remember that?

You put on your phone.

Yeah.

Or you put on your dash. Cost $100. It was a breakthrough. They were making like $100 million or something.

They were.

6 months later, what happened? The iPhone came out with Google Maps. These little bastards, excuse my French, came out with it, put Google Maps, put their own map on here, and it cost how much? Zero. What's that gonna do to your business when someone takes your product or service and gives it away for free? So I always tell people, competition happens, technology happens. What you must do is have a second business with no moving parts, no people, no time. Maybe it takes you 2, 3 days a year for 2 or 3 hours after you've read the book, you put it in place and you measure it 2 or 3 times a year, that's it. Go on with your life. Now if there's trouble in your business, you're financially set. I, in my life, have 31 companies now. We have, what do we have, 1,200 employees, 7 different industries, we do $5 billion in sales. I mean, that used to be, you know, me and my seminar business, it's grown geometrically.

Wow.

But with all those moving parts, the only way I've been able to succeed is because I've taken every one of those businesses and I've diversified my assets so that when things were in trouble, I still had enough economics to take care of myself and keep the business going. So everybody needs to create a money machine that works while you sleep. Mm-hmm. That doesn't have moving parts. And that's what this is really about.

Well, number 8 is use the 40/40/20 rule with Grant Cardone.

Do you have a philosophy where you should be saving a certain percentage of your income and putting it aside?

Yeah, I have a, I have a, I have a theory I use. It's a, it's the, um, 40-40-20 rule. 40% goes to the IRS. What do you call them over there?

The Queen.

Excuse me, the Queen.

Yeah.

Well, in Dubai, it's, it's Dubai, it's zero.

Yeah. You go, it's, you guys will end up with a tax over there.

There's 9% corporation tax.

Partnership. Yeah.

Yeah.

And you got a partner. The King's your partner.

In the UK, it's the HMRC.

Okay.

Yeah.

They're the ones that'll get you.

Whatever it is. Yeah. Whatever you pay to them, store for you.

Yeah.

So you're paying, paying them 40, you store 40 for you. I'm going to use the word store rather than save. And you live off of 20.

Okay.

So if you make $100 grand, you live off of $20,000, you store 40 for the Internal Revenue Service. I'm going to go back and get that. I'm going to get it back because of what I do with this other 40, because I'm not going to save this money. I'm going to use this money to make investments and these investments are going to offset that 40 and I'm going to get it back. The IRS, I'm going to get that money back later.

Yeah.

Or the taxes later with my investments.

Yeah.

So I'm going to operate like a corporation even though I'm an individual. Like all these big companies, they're not paying taxes. They're not paying them in England. They're not paying in Ireland. They're not paying. They don't pay them anywhere. All around the world. There's, there's tax hacks everywhere on planet Earth, but they don't— the hack does not come from spending money or improving your life lifestyle. It always comes from moving the money from earned income to some investment that pays you passive income.

Rule number 9 is focus on the assets with Robert Kiyosaki.

When I was leaving school, I was like, go to school, get a job, work hard, save money, buy a house because your house is an asset, get out of debt and invest in the stock market. I don't do any of that stuff. That's for suckers. I would never do that. So the reason working hard doesn't work is because this is called a financial statement. This comes from my Cash Flow board game, and I have a little video that says, you know, why games are the best teachers. You really want to learn about business, this is your financial statement. In real life, when I talk to my banker, this is what my banker wants to see. My banker doesn't want to see my grade card. My banker doesn't want to see what college I went to or my GPA.

GPA.

This is what my banker wants to see. So when they say work hard, well, here it is. This is poor dad here. You work really, really hard. What's your first line of expense? Taxes. So the reason I don't work for money is because I'll pay taxes. You want to pay taxes? Up to you. But taxes come from Marxism. Karl Marx said a graduated income tax is essential for the spread of communism. So the people that pay taxes here are communists, and the capitalists don't pay this tax. Like, you can watch Donald Trump, you know, Hillary Clinton accuses, he didn't pay any federal income tax, and Trump says that makes me smart. Hillary is an attorney, she's not very smart, you know, she may be academically smart, but this is why I don't want to pay taxes. So if you work hard here, you just pay taxes, 50% right off the top. Go to school to learn to be stupid financially, not very smart. So my rich dad taught me to focus here, the This is the balance sheet. You have to have income statement, balance sheet, statement of cash flow. This is what the cash flow game teaches you. So when I was a young man, I was taught to focus here on assets. So that's why when I left the Marine Corps in 1974, my rich dad said I had to learn how to sell and I had to learn real estate because real estate is based on debt. So I can get really quickly because I'm using debt to get rich to buy assets. So debt is a liability. Like Kenny McElroy and I, we buy an apartment house, the asset, and that provides cash flow, but we don't pay tax. Income comes like this. If you get a job, your first line of expense is tax. That's why I don't work hard for money. But of course, if you want to, to me it's stupid. But most smart people work hard for money, like doctors and lawyers. As I said earlier, doctors and lawyers pay the highest pay taxes. Good. That's the way it should be. But the capitalists down here, they make a lot of money and pay little taxes. So that's why you want to play cash flow, so you get your mind shifted down here. But if you go to school, you're shifted up here. And this is the key to the whole thing. It's called a statement of cash flow. Cash flow, the two most important words in business. The reason most people are poor is more cash is flowing out than flowing in. If you focus here, you focus on cash coming in and staying in.

And rule number 10, the last one before a very special bonus clip, is use a bottom-up investing approach with Howard Marks.

In investing, there are two basic approaches. One is called top-down, where you say, well, what's the industry— what's the economy going to do? What are rates going to do? Uh, uh, um, uh, which, uh, sectors of the economy will do best? Which industries will do best? Let's find some companies. That's one way to do it, top-down or strategic. The other way to do it is bottom-up. What's cheapest today? And that's more opportunistic, less strategic. And really, that's the way we operate. So, when we go out into the marketplace, we just say, "What's cheap today?" It's kind of like if you're a shopper and you have a Saturday off, you just say, "Well, where are the sales?" Mm-hmm. And we like to buy the things that are on markdown.

We have to deal in things that we're capable of understanding. And then once we're over that filter, we have to have a business with some intrinsic characteristics that give it a durable competitive advantage. And then, of course, we would vastly prefer a management in place with a lot of integrity and talent. And finally, no matter how wonderful it is, it's not worth an infinite price. So we have to have a price that makes sense and gives a margin of safety considering the natural vicissitudes of life. That's a very simple set of ideas. And the reason that our ideas have not spread faster is they're too simple. The professional classes can't justify their existence if that's all they have to say. I mean, it's all so obvious and so simple, what would they have to do with the rest of the semester?

And congratulations, you're one video closer to who you're meant to be.

Believe.

For 10 more amazing rules for success from the world's richest investors, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you there. What advice would you give a young person, like, um, getting into the stock market?

Like, oh, stock advice?

Wow.

Yes, sir. Yes, sir.

As, as I, I think people can, can perhaps tell,