Who is he?
Buffett is a legendary value investor with a net worth today of $107.8B. He was born in Omaha, Nebraska in 1930 (that’s why he is known as the “Oracle of Omaha”). Friends of Buffett claim that he was a mathematical prodigy even from a young age. On top of this, his father worked as a stockbroker, giving him an early beginning to his investing career.
A smart child, Buffett attended college at the ripe age of 16. His undergraduate degree is in business, split between the University of Pennsylvania and the University of Nebraska. After receiving his diploma, he would receive his master’s from Columbia University in economics. At Columbia, he was able to study under economist Benjamin Graham, who would later become his mentor.
Buffett married Susan Thompson in 1952 and they had three children together, Susie, Howard, and Peter. After Susan’s passing in 2004, Buffett got remarried Astrid Menks. He lives a rather simple life today in a 5 bedroom, 2.5 bathroom home. He has promised to give away almost all his wealth to charitable foundations, such as the Bill and Melinda Gates Foundation.
How did he become a billionaire?
Buffett began his path to becoming a millionaire after college. He worked under his father’s brokerage for a few years before transitioning to a job under his mentor Benjamin Graham. Through this job, he would become wildly successful and he hit his first million at 30. At age 35 he bought controlling stock in Berkshire Hathaway.
Berkshire Hathaway proved profitable for many years as Buffett’s partnership grew to a value of $104 million. In the mid-1970s the company began to struggle and Buffett’s net worth was lowered from $34 million to $19 million. However, being the intelligent investor he was, he increased his net worth back to $67 million by the end of the decade. With investments, his wealth continued to grow and when he turned 56, he earned the status of a billionaire.
What can we learn from Buffett?
We have seen his net worth skyrocket over the past years as a result of his savvy investments but how does he do it?
Buffett participates in what’s called “value investing.” This means that Buffett focuses on putting his money in stocks that have been unappreciated by the market. He buys those stocks at a low price before the company hopefully gains traction. If value investors plays their cards correctly, other investors will begin to recognize the intrinsic value of the company and purchase stocks in it. As more people buy shares of that company, the value of each share increases. Buffett buys low and sits on the investment for a long period of time as it gains wealth.
One of the biggest takeaways from Buffett’s journey is that patience in stocks is key. When a stock begins to go downhill, many pull their money out of it because they can’t stand to see the negative values in their bank account. During a rough patch, Buffett will keep his money in with the hope that the value will rise back up. Buffett’s philosophy explains that great things happen over time, not overnight.
My favorite Warren Buffett quotes:
“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”
“Price is what you pay, value is what you get.”
“The most important quality for an investor is temperament, not intellect.”
“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
ayr5274 February 10, 2023
Warren Buffett is one of those people that I’ve always known of but I don’t think I could have told you a single fact about him before reading this blog. I think his advice about sticking with stuff and to not expect instant gratification can be applicable to every aspect of life. It can be really easy to get discouraged when stuff isn’t working out, but I think it’s important to remember that good things don’t happen overnight. The whole “Rome wasn’t built in a day” kind of thing.
cbw5702 February 17, 2023
This was a very interesting post to read! I’ve heard a lot about Warren Buffet in the past, but never really learned much about him, or how exactly he became a millionaire. I have heard of several strategies when it comes to making money off of stocks, but Buffet’s method of investing is extremely interesting, especially since he seems to focus on the long term. He must be a patient man to be able to hold stock for over 10 years and wait for them to be successful, as well as investing in businesses that haven’t hit their boom of success yet. It’s nice that he is donating his money to good causes such as the Bill and Melinda Gates Foundation; the world would definitely be a better place if more million and billionaires were conscious about their spending and donations like Warren Buffet! Thanks for such a great post!