The Key Difference Between Knowledge and Wisdom

And why wisdom is more valuable

I used to think that I could learn wisdom from other people.

Ever since we are kids all the way up to age 18 when one usually finishes high school, we’re spoon-fed most of our learnings.

Teachers at school give us the basics of math, science, language, geography, and other subjects. Our parents try to teach us life skills like how to take care of the house and what good etiquette is. Society tells us how to get a career and work a 9 to 5.

But once you’re out in the real world, learning becomes more of a grind. No one tells you the exact way to climb the corporate ladder or build good relationships or start a business.

In the real world, you have to figure out how to achieve all of your goals by yourself.

That requires getting your hands dirty and learning from experience. You make a strategy, try it, fail at it, and then learn from that experience to improve your performance. You go through that cycle tens, hundreds, or even thousands of times, and eventually, you will achieve your goal.

The insight you gain through trial, error, and improvement is called wisdom. Therefore, wisdom is something that must be earned through experience and by taking action.

If you read a few books, then you can say that you’ve acquired knowledge, but not yet wisdom. To acquire wisdom, you must apply that which you have learned into the real world. Only then will you fully understand what you learned, it’s implications, and what it really means at the core level.

Take Warren Buffett for example. He’s been sharing his investing strategies with the public for years through his yearly Shareholder Letters. He talks about it on the news in interviews too.

Yet no one has been able to replicate his strategy or returns. Everyone has his knowledge because they can read easily read about it, but no one has his wisdom. They haven’t been investing in the same way for decades. They haven’t made and lost money in the same ways he has. They haven’t actually taken the action to move around money and apply the knowledge as he has. As a result, they haven’t earned the same wisdom.

Knowledge is something you can learn. People can tell you things, you can read some books, you can observe what other people are doing.

But the real value is in wisdom.

With wisdom, you’ve actually been in the trenches. You took your knowledge, applied it, and then got a result which you gained wisdom from.

Your wisdom is further amplified and reinforced over time. The longer you do something, then the more you experience, and the deeper you understand it. Some insights only come after putting in a lot of time.

People think that they can invest like Warren Buffett for a few weeks and make huge money. But Buffett bought his first stock when he was 11 years old…he’s 90 now. The guy has been doing it for almost 80 years. You do anything for that long and I’m sure you’ll be pretty darn amazing at it too.

Wisdom is not as easy to acquire as knowledge, but that’s exactly what makes it so valuable. It must be earned through the application of knowledge and learning from those experiences.

Put in the effort and you’ll gain that real value that only wisdom can provide.

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