I ran into an interesting set of comments by Warren Buffett the other day that I found very compelling — and just HAD to share them here.
Buffett was talking to a class of college students at Columbia University in 2009.
While there he discussed the value of a career. Of course he put the comments in terms only he can — as an investment with a specific value.
The Value of a Career
Here’s his first statement:
“Right now, I would pay $100,000 for 10 percent of the future earnings of any of you, so if you’re interested, see me after class.”
A few things to note about this comment:
- Warren knows that over a working career, the average college graduate is going to make AT LEAST a couple million dollars. So his 10% would get him $200k. Buying $200k for $100k is a smart move and one way he became so wealthy. Remember he has to account for the time value of money too — he pays now but gets paid back over 40-50 years. And he wants way more than an investment doubling in 40 years, so he probably thinks a career is worth much more than $2 million.
- He has good reason to think that. According to Business Insider, Columbia graduates begin with a median starting salary of $59,200. Assuming they work 45 years and get 3% average annual raises, they will generate career earnings of almost $5.5 million. If they work at growing their career just a bit and average 4% annual raises, that’s almost $7.2 million in career earnings. 5% annual gains gets them $9.5 million. Remember, this is just their earnings. Imagine what could happen if they took a portion of this money and invested it throughout those 45 years.
- Given the above, Warren is making a sucker’s bet. He would do quite well paying $100k for 10% of any of their earnings.
- It’s not just the average person Buffett makes the offer to. Note the words “any of you.” So even the one earning the least will still deliver a good return for Buffet. In other words, ALL of these careers are very valuable.
Let me summarize everything up to this point in one sentence: Warren Buffett and I agree completely on the value of a career. 馃槈
How to Make a Career 50% More Valuable
I ask quite often if people would try and grow a multi-million dollar asset. The answer? Of course they would. So that’s what everyone should do with his career — because it is a multi-million dollar asset.
And Buffett has given us a great head start to this end. He shares something he thinks will grow a career’s value by 50%!
Here’s his second comment:
“Now, you can improve your value by 50 percent just by learning communication skills–public speaking. If that’s the case, see me after class and I’ll pay you $150,000.”
That’s a pretty bold statement. Consider:
- Your entire career (education, experience, EVERYTHING) is worth $100k to him.
- Your ability to speak in public alone is worth an extra $50k.
Sounds like he puts a high value on speaking and communicating.
I would agree 100%. Being able to speak in public is a very valuable skill. Developing this skill is a great way anyone can grow his income and get those extra millions over the course of a career.
I’d actually expand the statement to all communication skills — speaking (to large or small groups and even one-on-one) and writing are very valuable skills that employers pay big money for.
My Experience with Communication Skills
I have seen the value of these skills first-hand in my career. I was fortunate to benefit from a several situations that helped me develop them (and realize higher earnings as a result).
It started in high school when it became clear that I was not going to be a star athlete. I turned my time an attention elsewhere and got involved in school plays, speech and drama competitions, and debate. By the time I left high school I was comfortable in front of a crowd.
At college I had more opportunities to speak to groups of all sizes. I was involved in a number of campus organizations plus held a staff assistantship. Many of these required me to speak regularly so my skills improved.
In graduate school many of our classes required a final project that we had to present. I built my skills even more, once delivering the entire one-hour presentation without notes for our whole team.
Also in graduate school I learned how to write well, through a grueling class that taught business writing.
Once in the real world I continued to develop these skills, both through the normal course of work as well as by attending seminars on salesmanship, presenting, and speaking to the media. All of these built upon each other and my skills kept growing.
I’m not sure being able to speak in public helped me increase my earnings by 50% by itself, but I am sure it had a significant contribution to my overall earning potential. Why? I think we all tend to assign all sorts of positive traits to those who speak and write well. We think they are more intelligent, skilled, capable, and so on. Companies tend to like these qualities and reward those who have them.
Of course there needs to be substance behind the style. You can’t speak your way to success — at some point you need to deliver the goods as well.
But I think it’s safe to say that being able to communicate effectively is a skill that can separate anyone from the crowd and help him earn more than he would without the ability.
That’s my take on speaking’s impact on a career. What do you think?
photo credit: Brisbane City Council 2012 Green Heart Schools public speaking competition via photopin (license)
Public speaking had a huge impact on my career. When I was in college, I took a public speaking course and talked about how investing small amounts over time could make you a millionaire (yes, I was a money nerd even then). One of the students came up to me after class and told me I had inspired him to start investing. This was the early 2000’s, so if he did that and continued to today he would be wealthy now.
When I joined the workforce, I decided to join Toastmasters to polish my speaking skills. My day-to-day job didn’t give me an opportunity to practice speaking. I got to meet people from all over the company (networking) and practice speaking at the same time.
Years later, I got presented with an opportunity to give a 5 minute speech in front of my company. My company has 30,000 employees. So thanks to those public speaking skills, I got to give a speech in front of the CEO and his direct reports, including my exec the CIO. Even though that was three years ago now, people still remember my speech because it had such an impact on them.
No doubt about it. I would also suggest that “interpersonal skills” be included as part of communication. If folks can’t get along with other people, and communicate (talk AND listen) well, they won’t get promoted.
I’ve promoted many people in my career. Folks can learn almost any job, but they have to bring communication and interpersonal skills to the table.
Completely agree with you ESI. The SVP of my department made similar comments to me about my career. If I can work on my presentation skills, I will become more valuable.
That’s a reason why I’m trying to read more and have various experiences earlier in life. By doing so, I can increase my perspective on the world and add value to people’s lives. I’m looking to build a rock-solid mind!
Thanks for sharing.
I agree. Being a good public speaker or even just starting out can open up many more opportunities. By itself it isn’t much but combined with other talents (influencing people, being organized, a good analyst and decision maker) this can increase your career value dramatically.
-Mike
One of the best things I got out of my master’s degree was practice in public speaking. It even got me an A in a class that I was going to get a B in; my prof was so impressed with my presentation she rounded up my B+ to an A (exams were brutal). But more importantly, it gave me confidence to speak in meetings of any size, present research topics at conferences, and improve my networking skills. I know that part of the reason my boss hired me was I explained problems well and presented results clearly. This is such an important skill now, when people of all ages spend so much time communicating electronically.
In my undergraduate years I obtained a BS in Computer Science and a minor in Economics. I remember profoundly in my last class of Computer Science there was a presentation. The teachers presented it, and my classmates confirmed, that for many of them it was the only presentation they had done in school. As an Econ Minor I had to present in every Econ class. That even led to an epiphany of sorts which is why my career exists today. Simply put most IT developers and Business folks seem to talk different languages. How can I bridge that gap. Every job I’ve ever held has leveraged some aspect of that learning. These days I live as much on the business process side as I do on the systems, but it has definitely benefited me that I can speak to the IT guy about requirements, the Executive about the priorities, and the grunt who does the job and make them all feel that I have their best interests at heart.
I started my career in the military and it was a requirement to be able to get up and brief everything from a complex plan to a simple book report. They really made us practice. Now, still working with the DoD for almost 16 years, the skill of speaking in front of large groups of people is still expected. It is a skill which means it can be learned. Some are better at it than others, but with practice over time anyone can achieve a good enough level to be seen as having a valuable ability.
As a Buffet fan, I enjoyed this post. good job.
There are many opportunities out there to practice public speaking in high schools. The best one for my children at the time was when they entered Boy Scouts. You were given opportunities to talk many of times in first time public speaking. My son was not the best public speaker but being in some way encouraged to pubicly speak in a positve environment at such a young age resulted 8 years later in him being the best public speaker and presenter and leader of his senior design project in front of a jury of piers. He even coached one member who struggled and had anxeity while presenting because the person had never had to present. That is what an Eagle scout does in mentor those who need help. It has all ready helped him in his professional career as he has had been put on the spot in many a meeting with questions on his production line he is required to manage.
As a scout memeber, Colin is a stammerer. Very unsure of himself to the point of one time he ran out while trying to public speak in front of all his friend and fellow piers went after him and brought him back. They helped him overcome public speaking. He is now an Eagle Scout, still stammers but his is confident in speaking in front of people more than someone who has never spoken in front of people. I know full well this will help him in the long run to acheive his full potential.
I know full well that public speaking would have helped me earn more early in my career. This is a very imprtant skill for anyone to learn.
Thanks.
I love Buffett stories and I had not heard this one.
I joined a Toastmasters group a few years back, and wish I had done it a decade earlier. Communication is not optional in business. It’s absolutely central and critical. And you can be as technically skilled as can be, but it will only take you so far if you can’t communicate, connect with others, tell stories, convey a point of view convincingly. Public speaking skills have helped me in so many ways – executive exposure, interviews, influencing business partners, you name it. Super important stuff.
That Buffet guy sure knows his stuff. I also agree that public speaking and the development of these skills is critical to a persons success and something I need to work more on. Thanks for the post.
Very good post, wish I knew this years ago when I started my working career. Also enjoy reading the Buffet quotes. I have never formally worked on my public speaking or communications skill. I am fortunate though in that about 30 years ago I joined a 12 step recovery group. Believe it or not part of my success with that program was learning to speak up at the different meetings I attended over the years. There are many people who are very uncomfortable just making small talk to strangers. My sponsor instructed me to always approach others at any meeting I attended, put out my hand to shake theirs and introduce myself. It became a habit that has served me well to this day.
I was in Toastmasters for a bit. It was valuable. I would look for a larger, more established club because things will run a bit smoother. Also, Toastmasters is very, very good at keeping you involved in Toastmasters, so make sure it serves you, not the other way around.
Very interesting. I remember taking a public speaking class in college, and I did pretty well with it. Unfortunately, I can’t seem to find a lot of opportunities in my work to put it to use. I’d love to see some posts that talk about finding speaking opportunities…that’s always been a hurdle that I’ve seen…not really knowing how or where to look to set things up.
What line of work are you in?
My job has me interacting with upper management and board members often. It’s definitely no coincidence that they all have different backgrounds and experience, yet they all have excellent communication skills in common.
Even in my short career, I can start to see communication skills becoming the driver behind most reputations and promotions.
Speaking well and being an effective communicator has allowed me to triple my salary in under five years. I am not sure if that speaks more to how little I made several jobs ago or how much organizations value a good communicator. I have worked hard to learn how to communicate a lot with few words. Warren Buffet and you are spot on. One can experience exponential career growth and earning power with great communication skills.
I knew that Warren guy was smart! If anything I believe he is understating the value of public speaking. The ability to speak to groups of people separated me from the pack. I was an introverted engineer in a group of introverted engineers but I volunteered to speak every opportunity I got. At first that was career day at the middle schools or teaching a Sunday School class at church but later that turned into civic clubs, local TV appearances and later on keynotes at national meetings. Along the way I met governor’s, first ladies, entertainers and business leaders who were also speaking and grew a network that has proven priceless. Eventually I even testified before both the Senate and House in DC for my entire industry. That ability to communicate in a clear and entertaining manner helped carry me past my competition from my entry level summer intern job all the way to running the company. It made my early retirement possible and has provided me a number of high pay side gigs to entertain me in my retirement. And my compensation when I retired was very good for my position so I think the 50% is actually very conservative.
Great advice. Unfortunately for those who suffer from crippling social anxiety, communicating effectively can feel like an insurmountable challenge. Even with adequate preparation, the fight or flight response can destroy your train of thought in an instant. I’m on a quest to uncover techniques which can aid in conquering this illness. There have been far too many instances when myself and others have never approached their full potential.
I’m planning to join Toastmasters in the next few days. I feel I’m pretty good with my “formal” communication and public speaking skills. However, I’m hoping to take my interpersonal skills and informal communication skills to the next level. I don’t know if TM will help. Does anyone have any recommendations for similar groups that are could help?
See if your employer offers any training. Some of my best public speaking training was paid for by companies I worked for.