Warren Buffett's 25-5 Rule

Overview

The 25-5 Rule (also called the "Two-List Strategy") is a focus technique reportedly used by Warren Buffett. The exercise involves listing 25 career or life goals, identifying the top 5 most important ones, and then treating the remaining 20 not as a "someday/maybe" list, but as an "avoid at all costs" list. This counterintuitive approach forces extreme focus by eliminating good opportunities that distract from great ones.

The Process

Step 1: List 25 Goals

Write down 25 things you want to accomplish in your career or life. These should be:

• Specific and concrete
• Genuinely important to you
• Things you'd like to achieve in the next few years
• Mix of professional and personal if desired

Examples:

• Learn Spanish fluently
• Get promoted to director level
• Write and publish a book
• Run a marathon
• Build a $50K emergency fund
• Master public speaking
• Start a side business
• Learn to code
• Travel to Japan
• (and 16 more...)

Step 2: Circle Your Top 5

Review your list of 25 and circle the 5 most important goals—the ones that matter more than anything else. This is difficult and requires honest prioritization.

Ask yourself:

• Which 5 would I choose if I could only accomplish 5?
• Which align most with my core values and long-term vision?
• Which would I regret not pursuing?
• Which have the highest return on investment?

Step 3: Create Two Lists

List A (Top 5): Your primary focus. These are your non-negotiable priorities.

List B (Remaining 20): These become your "Avoid-At-All-Costs" list.

Step 4: The Critical Insight

Most people think List B is "goals to work on when I have time" or "nice-to-have goals."

Buffett's insight: List B is dangerous because these goals are attractive enough to steal time and attention from your top 5, but not important enough to deserve that focus. They're worse than random distractions because they feel productive.

The Rule: You do NOT work on List B items until your List A items are complete.

Why This Works

Eliminates "Good" Distractions:

• Most productivity advice focuses on avoiding bad distractions (social media, TV)
• Buffett focuses on avoiding good distractions (appealing goals that aren't priorities)
• Your 20 un-chosen goals are attractive enough to seem worth pursuing
• But they dilute focus from what matters most

Forces Brutal Prioritization:

• Easy to say "all 25 are important"
• Choosing only 5 requires confronting tradeoffs
• Acknowledging you CAN'T do everything
• Accepting that choosing one path means not choosing others

Prevents Dabbling:

• People often make marginal progress on many goals
• Better to make significant progress on few goals
• "Warren Buffett's less successful peers were likely dabbling in dozens of areas"

Increases Focus:

• Limited goals = concentrated effort
• Deep expertise beats shallow knowledge across many areas
• Mastery requires sustained focus

Application Examples

Career Professional:

Top 5 (List A):

1. Get promoted to VP by mastering strategic thinking
2. Build executive presence through public speaking
3. Develop expertise in data analysis
4. Build network of 50 senior leaders in industry
5. Achieve work-life balance enabling family time

Avoid-At-All-Costs (List B):

• Learning graphic design
• Getting MBA (not required for VP)
• Starting a podcast
• Volunteering for every committee
• Learning additional programming languages
• (15 more good but not great ideas)

Entrepreneur:

Top 5:

1. Grow SaaS product to $1M ARR
2. Build team of 10 exceptional people
3. Master customer acquisition
4. Maintain health through consistent exercise
5. Be present for family dinners 5 nights/week

Avoid List:

• Writing a business book
• Speaking at conferences
• Learning video editing
• Optimizing personal brand
• Exploring new business ideas
• (All appealing, all distracting from the 5)

Common Mistakes

Mistake 1: Treating List B as "later" List B is not "when I have time." It's "never, because these distract from what matters."

Mistake 2: Choosing more than 5 priorities "I have 7 top priorities" means you have 7 competing priorities, which means none are actually prioritized.

Mistake 3: Not revisiting the lists Review annually. Your top 5 may change as circumstances evolve. But at any given time, you should have exactly 5 priorities.

Mistake 4: Choosing what others expect Your top 5 should reflect YOUR values and goals, not what family, society, or peers think you should prioritize.

Variations and Adaptations

Quarterly 25-5

• Apply to the next 90 days rather than life goals
• List 25 projects/initiatives possible this quarter
• Choose 5 to actually pursue
• Defer or cancel the other 20

Team 25-5

• Team lists 25 potential projects
• As a group, identifies top 5 to focus on
• Explicitly tables the other 20
• Prevents team from being spread too thin

Daily 25-5

• List 25 tasks you could do today
• Circle the 5 that truly matter
• Actively avoid the other 20 (delegate, defer, or delete)

Integration with Other Methods

With OKRs:

• Use 25-5 to choose which objectives to set
• Your top 5 become the basis for OKRs
• Avoid setting objectives around List B items

With GTD:

• Use 25-5 for high-level goal prioritization
• Use GTD for task management within chosen goals
• Ensure GTD projects align with your top 5

With Time Blocking:

• Block calendar time only for List A priorities
• Protect this time fiercely
• Say no to List B opportunities that arise

The Hardest Part

The hardest part isn't identifying your top 5—it's actively avoiding the remaining 20. These are good goals! They're appealing! They seem worth pursuing!

But that's exactly why they're dangerous. They're good enough to justify time investment, but not important enough to deserve priority over your top 5.

The discipline: When an opportunity related to List B arises, you must say "This is a great opportunity, but I'm committed to focusing on my top 5 priorities. I need to pass."

Success Metrics

You're successfully applying the 25-5 Rule when:

• You can name your top 5 priorities without hesitation
• You regularly say no to good opportunities outside your top 5
• You're making measurable progress on all 5 priorities
• You're NOT making progress on List B items (and that's okay)
• List B goals don't create guilt—you've consciously chosen not to pursue them right now
• People know you for expertise in your focus areas

Key Takeaway

"The difference between successful people and really successful people is that really successful people say no to almost everything." - Warren Buffett

Your List B items aren't bad goals. They're good goals. That's what makes them so dangerous. They can fool you into thinking you're being productive when you're actually being distracted from what matters most.