Billionaire Warren Buffett only has one diploma hanging on the wall in his office. Can you guess which one? It’s not from his alma mater Columbia Business School. Instead it’s a certificate of completion from a $100 Dale Carnegie’s course. The reason why is simple: “It changed my life”. In this podcast episode, Preston and Stig will take a close look at one of Buffett’s favorite books.

If you want to read our five page executive summary of this book, How to Win Friends and Influence People, view this page instead. If you would like to download all of our book summaries, click here.


In this episode, you’ll learn:

  • Why a book about personal relationships is perhaps the most important book Warren Buffett has ever read
  • How and why you should always look at yourself first before you place blame on anyone
  • How to make other people like you… seriously!
  • Why your intentions should always be sincere, and how they work like a boomerang
  • How to criticize another person – if you can’t avoid it
  • Why people will forget what you said, but never how you made them feel
  • How to become a great leader through personal leadership

Tweet your comments to this podcast episode directly to Preston, Stig and the rest of The Investor Podcast’s community using “#TIP69”

WSB Subscription Guide


If you would like to download the below summary of How to Win Friends and Influence People in .pdf format, follow the link.

PART ONE: Fundamental Techniques in Handling People

In Part One, Carnegie discusses the best ways to “handle people,” or to deal with others. In the first of the three sections of Part One, Carnegie reflects on the futility of criticizing others and advises to refrain from doing it at all costs. At the end of the section, he designates this notion as a principle: Don’t criticize, condemn or complain. The section begins with a discussion of hardened criminals, including the infamous Al Capone, and their inability or unwillingness to blame themselves for anything they had done wrong. While most people are not criminals, they nevertheless share this incapacity to criticize themselves for anything. This, as Carnegie sees it, makes criticism itself futile because, rather than making lasting changes, it usually incurs resentment.

Read More

The reason Carnegie advises against criticizing is that people are not “creatures of logic,” but “creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.” It takes a great deal more character to seek to understand people than to condemn them, and understanding—that is, trying to figure out why people do what they do—is far more effective than criticism, as it breeds tolerance and kindness. Carnegie concludes this section by reproducing “Father Forgets,” in which the author W. Livingston reflects on the shame he feels for criticizing his young son rather than understanding him.

In the second section of Part One, with a tantalizing title that promises to reveal a “big secret,” Carnegie explains the principle: Give Honest and Sincere Appreciation. There is only one way to get someone to do something, Carnegie explains, and that is by making the person want to do it. Key to igniting a desire for action in people is showing sincere appreciation for them. Heartfelt praise fulfills  people’s yearning for importance, a need that Carnegie categorizes alongside other commonly recognized essentials such food, shelter, health, and love.

This desire to be important is so strong that some people go to extremes to feel it, such as criminals who bask in having the spotlight on them when they’re caught. Or others who, disillusioned with their real lives, lose their minds to experience a feeling of importance. Most people, however, are more conventional and display their desire for importance by having a big house, a nice car, the latest gadgets, or, in the case of Carnegie’s father, by putting on view for all to see the blue ribbons he had won for breeding first-rate hogs and pedigreed cattle. Understanding this basic need for recognition in all of us is key to understanding the importance of showing honest appreciation for others. Genuine praise motivates people.

PART TWO: Six Ways to Make People Like You

Principle 1: Become genuinely interested in other people. Here again Carnegie points out people’s inherent self-interest by insisting that all of us are really only interested in ourselves. As such, trying to get people interested in us is futile, and it does not result in lasting and sincere friendships any more than it results in successful business endeavors. We have to be interested in other people to achieve both personal and professional success.

In carrying out these seemingly small yet significant acts, Carnegie advises that your interest must be sincere. Both parties must benefit because if others suspect insincerity or manipulation in your behavior, they will not trust you or cooperate with you. Real friendships and lasting relationships are built on taking a genuine interest in other people.

Principle 2: Smile. “The expression one wears on one’s face is far more important than the clothes one wears on one’s back.” Smiles are powerful because of what they communicate: happiness, pleasure in seeing someone, and regard for that person. Mechanical, insincere smiles, however, arouse precisely what one would imagine: suspicion and dislike. Your intentions must be sincere or a smile’s powerful action will not produce the desired effect.

Principle 3: Remember that a person’s name is to that person the sweetest and most important sound in any language. The inability to recall someone’s name communicates to that person your disinterest in him or her and his or her insignificance to you.

Carnegie charts the success of several figures who made a deliberate effort to always remember people’s names, including Andrew Carnegie and Jim Farley, the son of a poor New York farmer who rose to become chairman of the Democratic National Committee and Franklin D. Roosevelt’s presidential campaign manager. Franklin D. Roosevelt himself also made a habit of remembering names, a point Carnegie illustrates in a vignette about the president’s interaction with a mechanic from Chrysler who helped design a special car for him.

Principle 4: Be a good listener. Encourage others to talk about themselves. Intensive listening communicates your interest in people and, like remembering names, it makes people feel important. Carnegie chronicles how patient, sympathetic listening is appreciated in particular by customers, even unsatisfied customers, whose grievances can disappear once they encounter someone who will take the time to listen to them.

Principle 5: Talk in terms of the other person’s interests. Carnegie recounts how whenever Theodore Roosevelt expected a visitor, he read up on subjects he knew were of particular interest to that person. He understood that “the royal road to a person’s heart is to talk about the things he or she treasures most.” In other words, focus on what other people are enthusiastic or curious about.

Principle 6: Make the other person feel important—and do it sincerely, Carnegie explains in no uncertain terms that the principle of always making the other person feel important is an all-important law in human conduct, which will “bring us countless friends and constant happiness.” He likens it to the precept taught by ancient philosophers and religious figures from Asia to ancient Greece, and which Christians state as follows: “Do unto others as you would have others do unto you.” Obeying the Golden Rule is the way to sincerely make someone feel important, the desire that all humans share, according to Carnegie.

PART THREE: How to Win People to Your Way of Thinking

On what grounds can we tell people they are wrong? What end does it serve? In the art of human relations, striking direct blows against others rarely ends well for either party. Humans are not wholly logical beings, Carnegie contends, but prejudiced, biased, jealous and often proud. When we are wrong, we don’t readily admit it to others unless we are treated in a tactful and gentle manner, and almost certainly not if someone is aggressively or tactlessly trying to show us our misjudgment. Ridicule and abuse never prompt someone to agree with us and never encourage someone to admit their fault. Benjamin Franklin, Carnegie tells us, dropped all words from his vocabulary that conveyed a fixed opinion, such as “certainly” or “undoubtedly,” and replaced them with “I conceive,” “I apprehend,” or “I imagine,” far less aggressive and categorical terms.

But in this chapter, Carnegie’s emphasis is on letting other people talk themselves out; that is, allowing them to explain their business and problems. Your role is to listen patiently and with an open mind. This is effective in both business and family relations. Encouraging the other person to do most of the talking can make a favorable impression and make that person feel important and appreciated. It can also lead them to come around to your way of thinking because you are actively listening to them, to their issues and concerns, and showing them compassion

Carnegie illustrates this point with a telling story. When the manager of a small brokerage firm in California wanted to hire a highly capable salesperson who was entertaining numerous offers from other firms, he shared with him the singular advantage his firm offered: his salespeople are independent and virtually self-employed. He then sat back and listened as the interviewee talked about how that one feature really suited him and then proceeded to talk himself out of any negative ideas he was harboring about the firm. By choosing not to talk but to listen attentively, the manager succeeded in hiring a talented new member for his team.

Mastering the fine art of human relations requires understanding the value and importance of “Let the other person feel that the idea is his or hers”. Rather than bombarding others with your opinions, it is wiser to make suggestions and let the other person think out the conclusion. No one, Carnegie explains, “Likes to feel that he or she is being sold something or told to do a thing.” We like to be asked about our thoughts, ideas, desires and suggestions, and, for this reason, it is shrewd to let others feel ownership over ideas.

In the process of steering people toward your way of thinking, Carnegie recommends following “Try honestly to see things from the other person’s point of view.” There’s no way around it; success in dealing with people “depends on a sympathetic grasp of the other person’s viewpoint” and in showing that you consider his or her ideas and feelings as important as your own “If, as a result of reading this book, you get only one thing—an increased tendency to think always in terms of the other person’s point of view, and see things from that person’s angle as well as your own—if you get only that one thing from this book, it may easily prove to be one of the steppingstones of your career.”

What do you gain from seeing things from the other person’s point of view? According to Carnegie, it gives you a new perspective through which to frame your interaction with that person. It can also ease tension and lead to less friction in human relations. Thus, he advises, before you ask someone for something or try to convince someone of something, pause, close your eyes, and try to consider the whole thing through that person’s eyes and to figure out why they would want to do or think what you’re asking.

PART FOUR: Be a Leader: How to Change People Without Giving Offense or Arousing Resentment

Call attention to people’s mistakes indirectly. What would a thoughtful leader do if he were to find employees smoking directly under a “no smoking” sign? Charles Schwab found himself in precisely this situation, and instead of belittling his workers., he approached them, offered each of them a cigar, and kindly requested that they enjoy it outside. According to Carnegie, Schwab earned respect from his workers by giving them a little present and making them feel important while enforcing the rules in an indirect manner.

Indirect criticism can also be achieved by a simple change in vocabulary. Too often we express praise followed by the conjunction “but” as a segue to the critique we have to deliver: “I really liked how you presented that report, but I wish you had used more visual tools to enhance the presentation.” The effect is that others might doubt the sincerity of our praise if it is followed by such a negative transition. Carnegie recommends replacing “but” with “and,” which will help frame the unpleasant sentiment you have to convey in a positive light: “I really liked how you presented that report, and I look forward to seeing how you will employ visual tools when presenting in the future.” If your aim is to actually have someone correct their mistakes then the best strategy is not to draw attention to their faults in an obvious and direct way.

Carnegie clearly feels strongly about issuing criticisms tactfully as he also say that you should “Talk about your own mistakes before criticizing the other person.” Pointing out that we are all habitual committers of mistakes softens the blow of hearing criticism. In Carnegie’s words, “It isn’t nearly so difficult to listen to a recital of your faults if the person criticizing begins by humbly admitting that he, too, is far from impeccable.” Making mistakes is expected and part of the maturing process, whether that is maturity in age or maturity in professionalism. When people make mistakes, the aim is to have them correct and learn from them, something that’s far easier to achieve through with a gentle, humble touch.

Following on the theme of humility, Carnegie discusses more techniques of thoughtful leadership. “Ask questions instead of giving orders” —this is the art of giving people the opportunity to do things themselves. Instead of issuing directives (“We need to increase production now, and I need all of you to work more starting now”), posing questions that integrate employees into the process of finding solutions is usually more effective (“We need to increase production. What are the different ways we can go about this? What are the areas you see as needing improvement?)

Carnegie also advocates building up a person’s reputation. He claims the best leaders follow Principle: Give the other person a fine reputation to live up to. This entails stating and re-stating the great work someone does in order to create for that person a great reputation to live up to. It can also help a person improve in a certain area. If you act as though a desired trait were already part of a person’s repertoire of excellent traits, it is likely that person will live up to your expectations by exhibiting that trait.