Warren Buffett on Reputation

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

The above is a quote from the well-known investor Warren Buffett, and it’s one that’s been on my mind a lot lately, because it speaks to a value that a lot of people overlook.

In the town where I live, there are two car repair shops. One of them has a stellar reputation – a clean shop and stellar craftsmanship. The other shop has a reputation for lowballing the first shop – the craftsmanship is about the same, but the shop looks like a disaster area.

If those were just the differences, I’d probably be fine with using either shop, as would most people. I’d probably lean towards the cheap shop for minor jobs and the other one for intense jobs, but I’d be willing to stop by both of them.

But there’s one other big difference. The owner of the first shop spends a lot of time in the community working with youth leagues. He’s active in the chamber of commerce and also helps organize community celebrations. Because of this effort, I know the owner’s reputation – he’s a good guy who helps out in the community. The other owner? He doesn’t even live in town.

Care to guess which shop ends up getting my business?

Your reputation helps you out in countless ways, mostly in ways that you never actually see. The owner of that first repair shop knows me vaguely – we’ve said hello a few times at community events, but our paths rarely cross, to be honest. But I know of his reputation – I’ve seen him at lots of things and I’ve also heard about him from others. His reputation has preceded him – and it’s helped him gain more business.

In much the same way, indifference and negativity can add up to a neutral or even a negative reputation. I used to live near a guy with a negative reputation. He did things like having a surveyor determine that his land extended another three feet further than the purported property line, so not only did he immediately erect a shed to take advantage of some of that space, he sent the bill for the surveying to his neighbor. He would have giant parties in his yard and just invite a few people from the neighborhood, intentionally snubbing (for no real reason) some of the people near him, but inviting others. He’d lock his door if a child came knocking for Girl Scout cookies.

As a result, his reputation was in the trash and this brought him many difficulties. The people around him were constantly making his life harder in subtle ways. He’d often be the only person not invited to block parties. He attempted to start a small business and none of his neighbors frequented it – and all of them spread a negative word about it. He ran for a city election and received less than one percent of the vote. When he put up a political sign in his yard, every single neighbor around him in solidarity put up signs for that person’s political opponent.

Eventually, he moved away, but before he left he tossed a bunch of garbage onto the lawns of people around him. This whole matter eventually wound up in court and ended up hurting his reputation immediately in his new community.

How can you get started building a positive reputation? The best way to get started is to help people, and to do it over and over again without asking for anything out of it. Do it with your whole heart because you want to help. People notice more than you think, and over time your care and your energy will come through to them. Over time, it will build into something powerful, something that you won’t even directly be able to see.

The flip side of that coin is that one bad choice can destroy a reputation. You can spend twenty years doing everything perfect in your community, but one decision to drive while drinking can undo all of it. You can write two thousand wonderful articles, but writing one misguided one can drive away people. You can be thought of positively by a thousand people, but walking up before them and insulting all of them can quickly undo it all.

Think a little bit about the choices you make every day, particularly those in public. All of those choices that you make shape how others look at you – how they perceive and define you.

For some people, this won’t matter. They view themselves as largely unaffected by what the people around them think of them.

But have you ever knocked on your neighbor’s door and given them a loaf of bread you’ve made? Have you ever went over to your neighbor’s house and helped them clean out their laundry vent because they were struggling with it? Have you ever volunteered to referee games for a youth basketball league? Have you ever put a “Congratulations!” sign in the yard of a neighbor who was bringing home their first child?

These little things – and not-so-little things – add up to forming a positive reputation, and it’s one that will grow subtly over time. Eventually, you’ll find that your neighbor – or someone you don’t even know – will support you in some subtle way that you may never even notice.

Reputation matters. Keep it in mind when you step outside the front door today – and every day.

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.