Warren Buffett, the legendary investor and CEO of Berkshire Hathaway (BRK.A) (BRK.B), has offered countless lessons on money, markets, and discipline over the decades. But one of his most profound pieces of life advice has little to do with financial statements and everything to do with character:
“It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.”
At its core, this quote speaks to the power of environmental influence — the idea that the people you surround yourself with quietly shape your mindset, your habits, your ambitions, and ultimately, your trajectory. Buffett’s insight isn’t about comparison or competition; it’s about strategic proximity to excellence.
Success by Association
Buffett’s belief in the power of association is reflected not only in his personal friendships — most notably with Bill Gates — but also in his business decisions. In a public conversation with Gates at Columbia University, Buffett stated, “You will move in the direction of the people that you associate with. So it's important to associate with people that are better than yourself.” That wisdom has guided both his personal life and how he’s chosen the managers, partners, and CEOs he invests in.
At Berkshire Hathaway, Buffett has consistently favored business leaders with high integrity, strong values, and operational excellence — people like Ajit Jain and Greg Abel, whom he has praised as key to the company's long-term stability. His point is clear: great outcomes are the result of great people.
The Compound Interest of Character
What makes Buffett’s advice so powerful is its compounding effect over time. Just as financial investments grow through compound interest, our character and habits compound based on the people we interact with most often. Being around ethical, thoughtful, growth-oriented individuals nudges us toward becoming more ethical, thoughtful, and growth-oriented ourselves.
This principle applies just as much to friendships as it does to professional networks. Research in psychology supports Buffett’s intuition: studies show that people tend to adopt the behaviors, health habits, income levels, and even emotional outlooks of those closest to them.
In essence, we become who we spend time with.
How It Plays Out in Business
In business, this mindset translates to choosing partners and collaborators not just based on skills or profitability, but on integrity, alignment of values, and trustworthiness. Buffett has often said that he looks for three qualities in people: intelligence, energy, and integrity — and if they don’t have the third, the first two will ruin you.
That’s why he’s famously avoided getting into bed with individuals or firms with questionable ethics, no matter how tempting the financial upside. His approach emphasizes that long-term success depends more on character than cleverness.
A Countercultural Lesson
In a world that prizes independence and self-made success, Buffett’s advice is countercultural. It suggests that self-improvement is not solely about discipline or personal willpower, but also about curating the right company. It reframes networking from a tool of convenience into a conscious, values-driven strategy.
And in a digital age filled with echo chambers and algorithmically curated feeds, the advice to choose your influences carefully becomes even more essential. Whether in-person or online, the people we engage with shape our worldview more than we often realize.
The Takeaway: Audit Your Circle
Buffett’s message is a challenge to audit your social and professional circles. Are the people around you raising your standards or lowering them? Are they expanding your thinking or draining your energy? Are they challenging you to grow — or keeping you comfortable?
If success — financial or otherwise — is the result of thousands of small decisions over time, then surrounding yourself with high-quality people may be one of the most high-leverage decisions you can make.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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