Shonda Rhimes and Warren Buffett might seem worlds apart, but they have more in common than you might think, as an episode of “Call Her Daddy” revealed this week.
Rhimes, the 55-year-old screenwriter and producer behind hit shows including “Grey’s Anatomy” and “Scandal,” is a master of TV. Buffett, the 95-year-old billionaire CEO of Berkshire Hathaway, a $1 trillion conglomerate, is a master of investing.
On the podcast, Rhimes talked about money, risk, and strategy. She and Buffett have similar approaches.
1. They both spend wisely
Rhimes signed a multi-year deal with Netflix in 2017 that made her the highest-paid showrunner in Hollywood. She remained a frugal and discerning shopper even after that happened, she told host Alex Cooper.
“I’m still the person clipping coupons, and thinking maybe I should get that on sale, and maybe I shouldn’t get too comfortable with these shows,” Rhimes said.
Buffett is also careful in his spending. The CEO, who has a net worth of around $150 billion, grabs McDonald’s for breakfast during his morning commute, and once used coupons to help pay for lunch there with Bill Gates. He still lives in the home he bought for $31,500 in 1958, and once had a “THRIFTY” vanity license plate — not a very common way of advertising your frugality.
Some of his most famous quotes, oft cited by his followers, reflect financial prudence.
They include, “Do not save what is left after spending; instead, spend what is left after saving.” There’s also, “If you buy things you don’t need, you will soon sell things you need.”
2. They both think long and hard before acting
Rhimes said on the podcast that she fleshed out ideas in her mind for a long time before starting to write.
“I’ll spend a year thinking about something and then two days writing a script,” she said. “For me, it’s the world and the idea and the getting all the pieces in place mentally first.”
Buffett is willing to wait years before pouncing. He once said the stock market was “a device for transferring money from the impatient to the patient.”
When asset prices fell and liquidity evaporated during the financial crisis, he capitalized on the chaos, deploying $21 billion across five transactions between 2008 and 2009. His timing paid off as those positions were worth a combined $26 billion and collectively yielded more than $2 billion in interest and dividends by the end of 2009.
3. They both say young people should take bigger risks
Rhimes encouraged people to chase their dreams when they’re young, as it’s harder to quit your job once you’ve been working for a decade, owe more in rent, or have a family to feed.
“I always tell people, you’re never going to be as willing to be as broke and poor as you are right now,” she said. “It never gets easier. So, just jump.”
As the boss of one of the world’s biggest insurance companies, Buffett rarely takes big risks anymore. But he’s said that younger investors’ portfolios should have a higher proportion of stocks to bonds — a riskier position — as they have time to recover from any declines, allowing them to reap the rewards of long-term compounding.
“As an investor’s investment horizon lengthens, however, a diversified portfolio of US equities becomes progressively less risky than bonds,” Buffett wrote in his 2017 letter to Berkshire shareholders.
Buffett has also said it can be smart to act now instead of later: “What the wise do in the beginning, fools do in the end.”
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