The No. 1 Lifelong Habit Of Warren Buffett: The 5-Hour Rule

Author’s Note: This article was written over 60 hours with love and care using the blockbuster mental model.

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I remember the first time I heard that Warren Buffett spends 80 percent of his time reading and thinking, and has done so for his entire career.

I was even more surprised by how Buffett’s long-term business partner describes his weekly schedule:

You look at his schedule sometimes and there’s a haircut.

Tuesday, haircut day.

That’s what created one of the world’s most successful business records in history. He has a lot of time to think.

“WTF?!” I thought to myself. “That makes no sense.”

“How can the CEO of a company with hundreds of thousands of employees have so much free time while my schedule is packed?”

“What is the smartest investor in history seeing that I’m not?” I wondered.

After years of watching nearly every Buffett interview, reading his annual Letters to Shareholders, reading multiple biographies, and applying the lessons to my life, I think I finally have the answer to why and how Buffett has adopted this schedule.

This article shares that answer.

By the end of it, you’ll have a clear path to adopting the 5-Hour Rule (deliberately learning for at least five hours per week) and moving much closer to Buffett’s more intensive Learner’s Lifestyle (making deliberate learning your No. 1 competitive advantage and getting essentially paid to learn).

But first, let’s uncover what Buffett sees about knowledge work that most of us don’t.

The Case For The Learner’s Lifestyle

Knowledge has power. It controls access to opportunity and advancement.
—Peter Drucker

In short, all that Buffett research made me realize two things…

First, in a knowledge economy, learning and thinking are the single best long-term investments you can make in your career. Learning and thinking determine our decisions. Then, decisions determine our results.

Second, Buffett’s schedule is a harbinger of a new class of knowledge workers (especially investors, entrepreneurs, designers, developers, coaches, consultants, thought leaders, etc.) who realize that learning and thinking, not just doing, are the keys to their long-term success.

Let’s go a level deeper.

In 2009, Paul Graham, wrote an iconic article called Maker’s Schedule, Manager’s Schedule. Graham is the founder of Y Combinator, the most successful startup accelerator in history—a backer of Airbnb, Dropbox, Stripe, and Reddit. In the article, he spells out the difference between two types of schedules in a knowledge economy:

Manager Schedule: The manager’s schedule is for bosses. It’s embodied in the traditional appointment book, with each day cut into one-hour intervals. You can block off several hours for a single task if you need to, but by default you change what you’re doing every hour.

Maker’s Schedule: But there’s another way of using time that’s common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started.

Buffett’s contribution is a third category—the Learner’s Lifestyle.

In short, The Learner’s Lifestyle optimizes for insight over coordination and output. Whereas the manager’s schedule is primarily about coordination and the maker’s schedule is about output, the Learner’s Lifestyle is primarily about insight.

This distinction is simple yet profound.

When we design our life for insight, we organize our schedule completely differently:

• We optimize for free time over busyness. Whereas managers must ALWAYS be tuned in and turned on so they can be responsive, thinkers create big blocks of free time to go above the noise and gain perspective.

• We work in environments that lead to more creativity. As I wrote in Why Successful People Spend 10 Hours A Week On “Compound Time”, many of the greatest insights in history have come during a nap or on a walk, not necessarily within a cubicle.

• We invest dramatically more in learning, experimenting, and thinking because they are the fundamental building blocks of insight. Learning is about acquiring diverse, rare, and valuable chunks of knowledge through People, Information, & Experiences (what I call P.I.E.). Thinking is about synthesizing those chunks into rare and valuable combinations. Experimenting is about seeing how those combinations actually perform in the real world.

• We measure our success by the quality of insights we have, not by how quickly we finish our to-do list. In other words, our measure of success moves away from efficiency toward effectiveness.

The #1 Differentiator of the Learner’s Lifestyle

We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn.
—Peter Drucker

To put the Learner’s Lifestyle in context, let’s take a step back and think about what it means to be a knowledge worker in the 21st century.

No one has done a better job of this than Peter Drucker, perhaps the greatest management thinker ever.

In one of his great manifestos, Drucker makes the case for the importance of knowledge worker productivity:

The most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and knowledge workers.

This premise begs the question, “As knowledge workers, how do we increase our own productivity?”

If you read the latest “productivity porn,” the key to productivity is adopting the latest app, hack, or habit.

Drucker answers the productivity question at a deeper level, and his answer helps us think about what truly makes us productive in the long run.

Here are Drucker’s six factors for knowledge worker productivity:

1. Prioritization. Knowledge worker productivity demands that we ask the question: “What is the task?”

2. Autonomy. It demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves.

3. Innovation. Continuing innovation has to be part of the work, the task, and the responsibility of knowledge workers.

4. Learning. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.

5. Quality. The productivity of the knowledge worker is not—at least not primarily—a matter of the quantity of output. Quality is at least as important.

6. Purpose. Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an “asset” rather than a “cost.” It requires that knowledge workers want to work for the organization in preference to all other opportunities.

What makes Drucker’s knowledge worker productivity factors particularly interesting is twofold. First, almost all of the factors are the exact opposite of what makes a manual worker productive. Second, many knowledge workers today still organize their careers more like manual workers and almost exclusively focus on efficiency, working hard, and high daily output.

As you advance in your career to higher levels of knowledge work, this process becomes the ultimate way to create value.

Drucker breaks down the difference between quality and quantity in the manifesto:

In most knowledge work, quality is not a minimum and a restraint. Quality is the essence of the output. In judging the performance of a teacher, we do not ask how many students there can be in his or her class. We ask how many students learn anything — and that’s a quality question. In appraising the performance of a medical laboratory, the question of how many tests it can run through its machines is quite secondary to the question of how many test results are valid and reliable.

Productivity of knowledge work therefore has to aim first at obtaining quality — and not minimum quality but optimum if not maximum quality. Only then can one ask: “What is the volume, the quantity of work?

The application of 20th century Statistical Theory to manual work is the ability to cut (though not entirely to eliminate) production that falls below this minimum standard.

This simple difference of optimizing for quality over quantity in one’s work changes the game.

Quantity: Work harder with processes in place to make fewer errors.

Quality: Define what quality is and then create a process that maximizes it.

We see this distinction at play in Warren Buffett’s career. Buffett’s genius is that he prioritizes learning so he can have higher-quality insights.

Throughout Buffett’s career, he has only made a handful of investments per year. Describing his approach, Buffett says:

The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘Swing, you bum!’ ignore them.

Amazingly, there have been multi-year periods where Buffett has made zero investments. Can you imagine how difficult it would be to wake up every day for years and not invest if you were a professional investor?

Buffett understands and actually follows through on the logical implications of what it means to be a knowledge worker in a knowledge society.

Buffett and the Learner’s Lifestyle converts time into value in a completely different way than the typical approach to work, which borrows from the culture of routine, manual work.

Here’s the knowledge work assembly line for the 21st century:

Buffett is not alone in remaking his schedule around insight.

In my previous articles, I share the stories of many more entrepreneurs and leaders who have made time for deliberate learning throughout their entire careers. Other lumineer readers include billionaire entrepreneur Mark Cuban (three-plus hours a day), billionaire entrepreneur Arthur Blank (two-plus hours a day), billionaire investor David Rubenstein (six books a week), billionaire entrepreneur Dan Gilbert (one to two hours a day), Oprah Winfrey (credits reading for much of her success), Elon Musk (two books a day when he was younger), Mark Zuckerberg (a book every two weeks), Jeff Bezos (hundreds of science fiction novels by the time he was 13), and CEO of Disney, Bob Iger (gets up every morning at 4:30 a.m. to read).

The power of the Learner’s Lifestyle has existed for a long time. But, we are at a unique point in history that is increasing the returns on this lifestyle.

There’s a famous parable of a consultant that illustrates this perfectly.

The Rise Of The Learner’s Lifestyle