Updated on 04.18.08

Warren Buffett on Reputation

Trent Hamm

“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.

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  1. Stacey says:

    Beautiful! Your reputation can truly make or break you.

    I think we sometimes get too wrapped up in the “make a buck” process that we forget to be kind to each other. Thanks for the friendly reminder. :-)

  2. !wanda says:

    Your post strikes me as very insular. How many people does your town have? I’ve never lived somewhere where I knew most of the people who owned the businesses I frequent, even by reputation. Also, the fact that someone volunteers a lot and is a nice guy doesn’t have much to do with whether his shop can fix cars. Furthermore, way to go for punishing someone else (and your pocketbook) for the crime of living in another town. He could be a pillar of the community there, and you’d never know.

    “But have you ever knocked on your neighbor’s door and given them a loaf of bread you’ve made?” No; what if they’re gluten-intolerant or fructarians? It’s different if I’m friends with someone. But I’d rather be accused of indifference than nosiness or scorn.

  3. Luke F says:

    Great article and it does definitely make you think.

    I really liked the part regarding that neighbor. The question is why would someone do something like that? Was it really worth making the entire neighborhood mad at him?

  4. KC says:

    Its also a lot easier on your blood pressure to be a kind person every once in a while and not a crumudgeon (enter explicative phrase here) all the time. I live in a city and most people here are bad drivers and jerks, but I will let people into traffic, etc when I can. People always wave – probably out of sheer shock that someone is being nice – but it makes me feel good, slows me down (and my blood pressure) and hopefully that person will return the favor to someone else.

  5. LS says:

    I absolutely agree. I am not from this town (its a city, but because of the high military population, the rest of the civilians all seem to know each other), but my husband is. I’m amazed at what we get accomplished because of who he knows and how much all of these people really like him. On the other hand, I made a big moral mistake about ten years ago, and some people still won’t work with me because of it. Reputatition is everything, and I drive that home to my children every day.

  6. Uncle Midriff says:


    Of course a person’s voluntary service to the community has no bearing on whether or not they can fix cars. So, certainly, if Shop Owner A is a real nice guy who regularly replaces his customer’s oil with tomato juice by mistake, and Shop Owner B is a curmudgeonly old man who can make a 15 year-old car run like new, you should take your business to Shop Owner B. However, if Shop Owner A and Shop Owner B are mostly equal in skill and they are equally convenient for you to visit, who would you take your car to? Would you take it to the guy who never does anything for the community and will, at best, treat you with indifference, or will you take it to the guy who just helped raise money for children with cancer and usually greets you with a pleasant smile? Price will be a factor, but, as Trent demonstrates, reputation was powerful enough in this case to override the price consideration. In this way, Shop Owner A’s reputation, which has nothing to do with his ability to fix cars, benefits him financially in the long run, and Shop Owner B’s reputation, which has nothing to do with his ability to fix cars, is eventually a detriment to him financially.

    Regarding the idea that the other shop owner might be active in his home community, that’s a good point. That’s something that Trent or anyone else in town can’t really know though, so he can’t really consider it when making a choice between the two.

    You said: “No; what if they’re gluten-intolerant or fructarians? It’s different if I’m friends with someone. But I’d rather be accused of indifference than nosiness or scorn.”

    Agreed…however, he didn’t say to knock on your neighbor’s door and slam the bread down their throat before they have a chance to say “Hi.”

    My wife and I just moved to a new house in a new neighborhood (we closed on the house this morning!), and I’m kind of curious if any of the neighbors will officially welcome us at some point. If they don’t, that’s perfectly fine, but if some of them came over offering some sort of house warming gift, I would certainly appreciate it and will probably end up thinking more fondly of them than the other people in the neighborhood, even if I was allergic to the gift. Just the fact they the took the time to think about us would be enough to build up their reputation in my opinion.

    Basically, Trent is recommending that we invest in warm fuzzies. If you build up a large amount of warm fuzzies, chances are, people will like you more, and when people like you more, they give you stuff. Getting stuff shouldn’t be the only reason for investing in warm fuzzies, but it is a nice benefit.

  7. Greener Pastures: Responsible Personal Finance says:

    As I’m sure you’re aware, what you’re describing holds true for all aspects of sales. I work at a big company with lots of sales reps ( I do technical support.) When you ask any one of them what makes a successful sales rep, they all so they same thing first: People need to like you, think you’re a good guy.

    It’s number one on the list.


  8. !wanda says:

    @Uncle Midriff: OK, I agree that it’s a good thing to be nice to people. I don’t like it, though, when personal factors like what the proprietor does in his spare time (so, different from whether he smiles when I’m in the store) influence anyone’s business decisions. It feels unfair. There are plenty of nice, competent people who are just shy, and enough pedophiles and murderers have been “pillars of the community” that I don’t trust this kind of public facade. In addition, I was trying to point out this sort of reputation building is more important in small communities. My physical community is very large and has a lot of transients, so while I try to be nice to people, I really don’t expect those people to remember me or even ever see me again.

  9. !wanda says:

    Or rather: a good reputation only has worth in a repeated game.

  10. fathersez says:

    I agree completely.

    A good reputation, for fairness, dependability, kindness, honesty etc can be worth a lot more than we realize.

    Warren(as he is on so many other issues) is certainly wise about human values.

  11. gr8whyte says:

    Like !wanda, I’m having a little difficulty here. The guy with the negative reputation evidently earned it — he went out of his way to antagonize his neighbors and neighborhood and would probably have a difficult time no matter wherever he went — but it seems a bit unfair that one’s choice of which shop to use should be based on what else the shopowner has done for the community instead of the quality/value/etc. of the work itself. I’m not sure it’s wise to mix the different flavors of technical/business versus personal performance. My argument is based on having observed the inverse problem — that a worker who had poor technical skills but who was well-liked in a technical organization was frequently given plum assignments based solely on his personal reputation with management even though the technical results of his work were measureably poor and sometimes fatal to the systems he worked on. To be fair, he had occasional bouts of brilliance but the general consensus among his peers wasn’t good and it was baffling to many why he kept getting the better assignments. The popular shopowner’s personal efforts could be recognized by the town with a formal dinner and an award but folks ought to solely consider his shop’s technical reputation when choosing one.

  12. gr8whyte says:

    Oops, sorry! “no matter wherever he went” should be “no matter where he went” or “wherever he went”.

  13. George says:

    It is so true. Unfortunately these days, people are very driven by price when they shop. However, once a business owner builds a relationship with their customers, it is unlikely the person will want to go elsewhere. Its that comfort level people have. Nice article Trent!

  14. PBJ says:

    Reminds of the joke about the old Welshman Owen, sitting in the pub:

    “I sewed sails for 30 years, never a one did break in the worst gales known to man. But do they call me Owen Sailmaker?”

    “I built fences for 30 years, never a single animal ever left one of my pastures. But do they call me Owen Fencebuilder?”

    “But, you screw one sheep …”

  15. Lynn says:

    When the factors are the same, you have to use a variable to choose. Shop Owner A is involved in the community and the other one isn’t…which side of this variable do you choose?

  16. Adam says:

    just because the guy is involved in the community, that doesn’t make him a good guy. my girlfriend was working for a guy that ran an auto salvage yard. while the guy was very involved in his church and youth group, he treated her and the rest of the employees like trash. he always complained when she had to take off cause her kids got sick, and eventually fired her because of it, and he put the car part pulling guys on commission instead of hourly pay to get them to work faster (you can only turn bolts so fast) so all it did was decrease their pay.

    so just because the guy appears to be good on the surface, if you look in a little, he may be no better or worse then the guy that runs the dirtier shop. the dirty shop boss may treat/pay his employees better actually.

  17. Lynn says:

    Great article Trent!
    Been reading your post for a while and this is my 1st post.

  18. partgypsy says:

    As a female I would be biased towards the cleaner shop. My uncles (both for jobs and as hobbies) were mechanics. Being a mechanic doesn’t mean you have to be dirty or sloppy! A clean shop to me signifies a well organized shop, one where the workers have time to do the job properly, take care of their tools and pay attention to detail. My stereotype of a dirty shop is one where they they may take shortcuts.
    I could be totally wrong, but that’s the impression it gives me.

  19. Trent Hamm Trent says:

    “I’m kind of curious if any of the neighbors will officially welcome us at some point.”

    We have four people that could reasonably be called neighbors. Three of them came over and personally introduced themselves within a week, as did a few other families that lived relatively nearby. One of those three gave a housewarming gift. The fourth neighbor is really nice, but very, very shy and quiet – you have to make a sincere effort to communicate there.

  20. Corban says:

    Is the job an extension of a person’s personal life, or totally separate? People are thinking differently nowadays, and another example would be how it’s now OK to talk about work-life balance in an interview process. Before, it might’ve been dismissed.

    They know they are mixing the two, and they morally justify it. This isn’t necessarily wrong; they’ll just have to watch out for the times when they confuse gregariousness with skill.

  21. yvie says:

    I come from a small town and have moved to a bigger city. It doesn’t matter where I live: If I want to get my car fixed (or hair cut, or whatever), I generally ask a long standing citizen of my community for a recommendation. When you run a business, you’ve got to start somewhere, and getting “out there” in your community by helping out is a good place to start.

    I will decide on my own after a while the best places to frequent, but businesses have to know that if they are active in the community it will translate into more sales.

  22. KoryO says:

    Have to second partgypsy’s opinion. My dad was an airplane mechanic, and so was my uncle. Both of them had clean work areas, both on the job and off (they did their own car maintenance).

    Once I had to take a car into the dealership for work. There was some computerized part that my dad did not feel comfortable messing with, so off to the shop we went. My dad took a look around the service area before I dropped off the car, then told me that it was one of the cleanest he ever saw….and that specifically made it a place he would take his own car to be worked on if he ever needed it.

    To this day….I refuse to take my car somewhere that is messy. Sure, a messy mechanic could be a decent one, but I really don’t want to pay extra for “labor” when all it may really be is paying for him to find out which pile of junk is “hiding” the part or tool he needs.

  23. Tall Bill says:

    Great Post Trent! When we moved 7 years ago, 2 of 7 neighbors made contact. Over the few years following, some short contact was made talking over the fence, etc. It was the massive wind storm of 2006 in the Seattle area that brought all of us together for a meal at one home with emergency power. It really goes back to neighbor helping neighbor & not building walls around us. Without caring community service in one form or another, this country is really in trouble. Take Care!

  24. NP says:

    Maybe Trent’s choice of example was not ideal, but the point is made: Your reputation could affect your business dealings. Courtesy can color people’s opinions of you. If you do not make a good impression on a person, they may find another place to obtain goods and services taking their network with them. If you DO make a good impression, they are more likely to return and to recommend you to their friends too. Of course if your work is below par no matter how nice you are, that will kill your opportunity with the potential customer. Perhaps Trent’s choice of example reflects his own values. He admires and respects people who contribute to the community and wants to support them in monetary ways. As I read this article, I reflected on my own community, which is a small navy/southern town. I DO admire the pillars, but often feel that they already HAVE the business established. I tend to make up my own network based on friends’ recommendations and my experience. I do like getting my son’s hair cut at the barber who donates bikes to the schools for reading prizes though. I like patronizing the Chic-fil-a that provides many fund-raising opportunities for our schools and community. I chose my financial planning guy because my dad recommended him and it didn’t hurt that he went to my church and served in the community in many leadership roles. His willingness to get involved in the community certainly puts him in contact with a lot of potential clients that admire and respect his activities and need a financial guy.

  25. Lenore says:

    >>>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.<<<

    Sorry, Trent, but I’d go to the other shop if it’s cheaper. Appearances can be deceiving. John Wayne Gacy played a clown for kids and was involved with civic organizations. Ted Bundy and Jeffrey Dahmer were clean cut and charming by all accounts. Maybe it makes more sense to donate money saved to charities we select.

  26. Lenore says:

    Warren Buffet’s artist granddaughter told Oprah the multi-zillionaire has never given her a dime except college tuition. I suppose he wants her to know how to earn her own way, but it seems rude and ridiculous. If you won’t share money with people you love, what’s the point of accumulating more than you need?

  27. Mary says:

    I think that !wanda makes a valid point. You can’t judge the book by its cover so even the nicest most community oriented person could be a street angel and a home devil. There seems to be several issues here that don’t quite allign. We are talking about reputation, as a buisness owner, a neighbor, and as someone in the community. I honestly believe they are 3 seperate things. The businessman can easily hide behind his community reputation. The nice neighbor who baked someone cookies when they moved in next door could be beating the spouse/kids, be a drug dealer, who really knows. That person might be a real jerk when he thinks nobody is looking.

    Maybe it’s just the culture in which I live but, I have found that getting too friendly with your neighbors is not always a good idea. It just opens up a lot of opportunities for something bad to happen, people are nosy by nature, some are bussy bodies and others will knock on your door every day asking for everything from a cup of sugar to toilet paper. I’d rather say hi and be cordial w/ my neighbors and be regarded as the “quiet one who doesn’t bother anybody.” But of course it’s always best to be a good samaritan, giving out candles when the power goes out, etc.

    Reputation is certainly important and your actions count. However, Things we do and say are not always interpreted by others in the same way. It has been shown that we formulate an opinion of someone within the first 30 seconds of meeting them. And everyone is different but some ppl do not tolerate those who are not like them. And things like cleanliness can be interpreted in different ways. The guy who keeps his shop clean as a whistle may not charge you to look around for a tool as the messy guy would. But he may charge you to clean up after he does the work. Maybe the messy guy cant help his disorganization, he could have ADHD or something. We tend to be biased ppl by nature but I think that’s wrong. You have to take the time to actually get to know someone, not only looking at their bio before you can really make an informed decision.

  28. yvie says:


    I believe most millionaires (or in his case multi-zillionnaire) are not necessarily overly charitable to their families by nature (I read the “Millionaire Mind”, if Warren Buffett fits in that category I don’t know…) Anyway many millionaires don’t help family members beyond helping them with their education as they may be afraid that they would contribute to a life of dependence. Actually I admire his self-control in helping out his niece but knowing where to draw the line…..when you are a multi zillionaire everyone would want a piece of that profit….but people really have to learn to make it on their own in order to become successful. Helping with education is really like “teaching a person how to fish….” instead of feeding them for a day.

  29. Mary says:

    Giving someone the tools for success, like paying for college, is going to pay off in the longrun although people really need to be taught how to budget, manage money and make discriminating choices on what to spend on. My parents have given me a virtual fortune because I was taught how to do these things. Even things so simple as writing the account # or specifying the month and rental property on the check is not always common sense for some. I have seen people get screwed, one friend was taken to court by his landlord and, because the check didn’t specify what it was for, he ended up owing the slumlord many months of rent. There is a big difference between being book smart and educated and learning real life skills. Having common sense also helps.

  30. gr8whyte says:

    In my experience with a number of oil-change, auto- and body-repair shops over many years, I’ve come across all combinations of clean/grimy shops that did good/poor work and found no correlation among them. It all depends on the shopowner and the people he chooses to work for him in his shop. One was a dealer in another state ~1800 miles away who had a sparkling shop and did excellent work; I’ve gone to him twice and will again. 2 shops I currently frequent now happen to be grimy ones who do good work and charge competitive rates; one is in my town and the other is 30 miles away in the next town. If any of them doubled his rates, I’d still go back to them because I’m going back for their skilled labor and the treatment I received, not for the cleaniness of their shops. IMO, a grimy shop that’s been in business for a long time, has a good word-of-mouth reputation and charges competitive rates is likely a shop that does good work.

  31. michael says:

    His granddaughter has and will always be well taken care of by most standards, and no doubt experienced any number of benefits throughout her life simply by virtue of her grandfather’s fortune. When he dies, she’ll be wealthy (wealthier?).

    On the other hand, Mr. Buffet has literally given billions of dollars to help millions of people the world over. His philanthropy is unprecedented in the history of the world, with a recent $37-billion dollar contribution(not to mention countless millions prior to that). Most of his life outside of his business has been devoted to helping others not fortunate enough to be his granddaughter.

    I wouldn’t begrudge the many anything.

  32. Gene says:


    Regarding “Appearances can be deceiving” … I agree. Evil people exist and are some are quite successful at hiding their evil. Read “People of the Lie” by Doctor M. Scott Peck for the how’s and why’s.

    I am generally uncomfortable with your other comments.

    Were Mr. Buffet less “rude and ridiculous” his relatives might include Paris Hilton’s “BFF”. I suspect he sleeps well knowing his decisions have not led to the moral decline of those he loves.

    Regarding some other postings:

    There are many people in this country that get suprised that their lifestyles/opinions affect their professional lives. There are many examples of this from the entertainment industry. What is less obvious is day-to-day decisions that cumulate. That idiot in the right lane is crazy to think I’m going to let him merge just because he thought he could gain a few car lengths … oops, that was a regular customer to whom I was just rude! Or maybe it was a co-worker, school teacher, neighbor, friend-of-a-friend, or police chief! BTW … not letting someone merge is a favorite passtime of many drivers in Mr. Buffet’s home town!

    So is it “fair” for mis-steps in life to affect our professional lives? I would first state that I don’t expect fairness. We live in an imperfect world. But given the question, I say yes. We should not be suprised by negative consequences to mis-steps.

    Regarding Mary’s comment (#27) … I am one person, not three. I strive, and frequently fail, to be a good person in all areas of life. If I practice patience at home and on the road I am more likely to have a habit of patience that will help me at work. If I am rude and crude at home or when out with the guys I am likely to slip up at work because that is who I am.

    I guess I am taking a retrospective approach whereas many of the other posters are looking outward at how they would respond to other’s actions. What does that tell you about me?

  33. stuart says:

    i know lisa buffett. she is a beautiful person. i have met warren buffett too. he is a cool guy. everybody will benefit from his kind donation. thnx..

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