The 3 Questions Warren Buffett Asks Before Making Any Decision

It’s March 1, 2026. The financial world just held its collective breath as the annual shareholder letter from Berkshire Hathaway hit the wires. For decades, this yearly ritual was the voice of the Oracle himself, Warren Buffett. But this year, the byline is different. It’s authored by CEO Greg Abel, the man tasked with steering the massive ship in the post-Buffett era.

If you’re anything like me, you probably don’t spend your Saturday mornings refreshing financial news feeds. But there is a profound lesson buried in that letter that applies to every single one of us, whether you own stock or not. Despite the change in authorship, and despite the shifting sands of the global economy, the core message remained identical. The company is sitting on a staggering $373 billion cash pile, and they aren't spending a dime of it unless the opportunity is perfect.

In a world that screams at us to hustle, to move fast, and to buy into the next big thing immediately, this level of discipline is almost shocking. It forces us to look in the mirror. How many of our own bad decisions—in relationships, in careers, or with our health—came from a lack of patience? How often do we swing at bad pitches just because we’re bored or afraid of missing out?

The genius of the Buffett philosophy, now carried forward by Abel, isn't complex math. It’s simple filtering. Before making any major move, they run the decision through three specific questions. If the answer to any of them is "no," the deal goes into the "Too Hard" pile, and they move on. I’ve started applying this framework to my own life, and the clarity it brings is nothing short of life-changing.

The Core Idea: The Discipline of the "No"

We live in an era of decision fatigue. From the moment we wake up, we are bombarded with choices. What to eat, what to read, which email to answer, which "opportunity" to chase. It wears down our resolve. By the end of the day, our brain’s CEO—the prefrontal cortex—is exhausted. That is usually when we make our worst mistakes. We skip the gym, we snap at our spouse, or we buy things we don't need.

The Berkshire Hathaway approach is essentially a mechanism for preserving mental energy. By having a strict filter, you don't have to agonize over every option. You just run it through the checklist. If it fails, you walk away. No emotion, no regret.

The 2026 shareholder letter reaffirmed that this filter is the only reason the company has survived and thrived for over 60 years. It’s not about being smarter than everyone else; it’s about being more disciplined than everyone else. Let’s look at the three questions that act as the gatekeepers for this kind of success.

Question 1: "Is this within my Circle of Competence?"

This is the first and most critical hurdle. Buffett has famously stated that the size of your circle of competence doesn't matter; knowing its boundaries, however, is vital. This means you only make decisions in areas where you have genuine, deep expertise and understanding.

For a long time, I ignored this advice. I thought being "capable" meant I had to be able to do everything. I work as a web developer and marketer, juggling various projects to keep the lights on. In the early days, if a client asked me to do something way outside my wheelhouse—like complex backend server migration or high-level app development—I would say "yes" out of fear. I didn't want to lose the income.

The result was always the same: absolute misery. I would spend weeks stressed out, losing sleep, and delivering subpar work because I was operating outside my circle. I wasn't just risking my reputation; I was destroying my peace of mind. Eventually, I learned the hard power of saying, "That is not my specialty, but I can introduce you to someone who can help." Staying within my circle didn't limit my income; it actually increased it because I became known as an expert in the things I actually knew how to do.

When you step outside your circle of competence without caution, you are gambling, not deciding. In the investment world, this is how people lost everything in the dot-com crash of 2000 or the speculative bubbles of the 2020s. In real life, this looks like taking a job you hate because of the title, or trying to fix a complex relationship issue without professional help.

If you cannot explain how something works or why it will succeed in simple language, it is outside your circle. Put it in the "Too Hard" pile.

Question 2: "Does this business have a sustainable 'moat'?"

In medieval times, a castle was only as good as its defense. If you had a pile of gold inside but no walls, it was only a matter of time before someone took it. In business, a "moat" is a competitive advantage that protects a company from rivals. It’s what keeps the profit safe over the long term.

But what does a "moat" look like in a human life?

A personal moat is anything that protects your well-being and stability from the chaos of the world.

Financial Moat: Do you have an emergency fund? If you lose your job tomorrow, are you safe for six months? If not, you don't have a moat, and every decision you make is driven by fear.
Physical Moat: Is your body resilient? I lift weights three times a week, not because I want to look like a bodybuilder, but because I want a back that doesn't give out when I pick up a grocery bag. That physical strength is a moat against injury and aging.
Emotional Moat: Do you have a practice of silence or prayer that keeps you grounded when things go wrong?

In the 2026 letter, Greg Abel reiterated that they look for high returns on equity as a sustainable 'moat' fingerprint, ensuring the business can weather storms. When you are making a life decision—like moving to a new city or starting a new habit—ask yourself: Is this building a moat? Is this adding a layer of protection and durability to my life? Or is it leaving me exposed?

If a decision looks flashy and exciting but leaves you vulnerable (like buying a car that stretches your budget to the breaking point), it has no moat. Walk away.

Question 3: "Are the people running it able and honest?"

This is the final filter, and arguably the most important one. You can find a business within your circle of competence, and it might have a great moat, but if the people running it are dishonest or incompetent, the ship will eventually sink.

Buffett looks for three traits: Intelligence, Energy, and Integrity.

He famously warned that if a person doesn't have the last one—integrity—the first two will kill you. A smart, energetic person with no integrity is a dangerous enemy. They will use their intelligence to scam you and their energy to do it faster.

We often compromise on this in our personal lives. We keep friends who are fun (energy) and smart (intelligence) but who gossip about everyone else or lie about small things (no integrity). We tell ourselves it doesn't matter because "they're fun to be around."

But eventually, that lack of integrity will turn on you.

In the Christian Orthodox tradition, there is a strong emphasis on "guarding the heart"—being vigilant about what, and who, you allow into your inner world. If you surround yourself with people who cut corners, you will eventually start cutting corners. If you work for a boss who treats clients poorly, eventually you will be the one treated poorly.

When evaluating a new opportunity, a new partner, or even a new friend, look at their track record. Do they tell the truth when it’s inconvenient? Do they own their mistakes? If the answer is no, it doesn't matter how charming or talented they are. Pass.

The Art of the "Too Hard" Pile

The beauty of this system is that it gives you permission to do less. Most people think success comes from saying "yes" to everything. The Buffett/Abel approach proves that massive, compounding success comes from saying "no" to almost everything, so that when the right thing comes along, you can go all in.

They call this the "Too Hard" pile.

If a decision requires you to learn a complicated new skill from scratch just to understand the basics? Too Hard pile.
If a relationship is constant drama and requires you to be a therapist rather than a partner? Too Hard pile.
If a financial investment keeps you up at night because you don't understand the risks? Too Hard pile.

There is no shame in this pile. In fact, filling it up is a badge of honor. It means you are protecting your time and energy for the few things that actually matter.

Conclusion: Simplicity is the Ultimate Sophistication

As we look at the transition of power in one of the world's largest companies, the lesson isn't about stock tickers or billions of dollars. It’s about the quiet power of consistency.

The world in 2026 is faster, louder, and more confusing than ever before. The temptation to complicate our lives is immense. We feel like we need complex routines, complex diets, and complex career paths to keep up.

But the most successful decision-making framework in history is simple.

Do I understand it?
Is it durable?
Are the people good?

If you can discipline yourself to ask these three questions before you commit your time, money, or heart to something, you will stop drowning in noise. You will build a life that is not just successful on the outside, but peaceful on the inside. And in the end, that peace is the only dividend that really counts.