How Warren Buffett became one of the richest people in America.

Warren Buffett is one of the richest and most influential people in American business. He is the sixth richest member of the Forbes 400 list with a net worth of $108 billion as of May 2021. Living and working in Omaha, Nebraska, Buffett has been nicknamed the “Oracle of Omaha” for his investment choices.

Warren Buffett’s early investments 1930-1949.

1930: On August 30, Warren Edward Buffett was born to his parents, Howard and Leila Buffett, in Nebraska.

1941: At age 11, Warren buys his first stock. He buys six shares of Cities Service preferred stock-three shares for himself, three for his sister Doris-at a cost of $38 per share. The company drops to $27, but quickly rises again to $40. Warren and Doris sell their shares. Almost immediately, they rise to more than $200 per share.

1943: Warren declares to a family friend that he will be a millionaire by age 30, or “I will jump off the tallest building in Omaha.”

1945: Warren earns $175 a month delivering Washington Post newspapers. At age 14, he invests $1,200 of his savings in 40 acres of farmland.

1947: In his senior year of high school, Warren and a friend purchase a used pinball machine at a cost of $25. Buffett begins to think about the potential profit and places it in a nearby barbershop. Within a few months, he owns three machines in three different locations. The business is sold later in the year for $1,200 to a war veteran.

In the same year, Warren earned more than $5,000 delivering newspapers. His father urges him to attend college, a suggestion Warren does not take well. However, that year, he enrolls as a freshman at the Wharton School of Finance and Commerce in Pennsylvania. Buffett hates it, complaining that he knows more than the teachers.

1949: Classmates return and discover that Warren is no longer enrolled at Wharton. He has transferred to the University of Nebraska. He is offered a job at J.C. Penney after college, but turns it down. He graduated in just three years with a Bachelor of Science in business administration taking his last three credits during the summer. His savings reached $9,800.

How Buffett came to $25 million 1950-1969.

1950: Buffett applies to Harvard Business School and is rejected. He eventually enrolls at Columbia after learning that Ben Graham and David Dodd, two well-known security analysts, are professors there.

1951: Warren finds out that Graham is on the board of GEICO insurance. One Saturday morning, he takes a train to Washington, D.C., and knocks on the door of the headquarters until a janitor lets him in. After asking if anyone is working that day, he finds Lorimer Davison, a GEICO executive. They talk for four hours as Warren questions him about the business and insurance in general. After their discussion, Buffett is so enthusiastic about GEICO that the following Monday he spends 65 percent of his $20,000 savings to buy GEICO stock, which eventually grows into a huge fortune. Buffett now owns GEICO entirely.

Buffett graduates from college and wants to go to work on Wall Street in the same year. Both his father, Howard, and his mentor, Graham, urge him not to. Warren offers to work for Ben Graham for free, but Graham refuses.

He buys a Texaco station as a side investment, but it does not work out as well as he hopes. Meanwhile, he works as a stockbroker.

Buffett attends a Dale Carnegie public speaking course. Using what he learned, he begins teaching an evening course at the University of Nebraska, “Principles of Investment.” The students are twice his age, as he is only 21.

Warren returns home and begins dating Susan Thompson. In April, Warren and Susie get married. They rent an apartment for $65 a month and have their first daughter, also named Susie.

1954: Ben Graham calls Warren and offers him a job in his company, the Graham-Newman Corporation, an investment firm. Buffett’s starting salary is $12,000 a year.

1956: Graham retires and closes his company. Since leaving college six years earlier, Warren’s personal savings have grown from $9,800 to over $140,000.

That same year, the Buffett family returns home to Omaha. On May 1, Warren creates Buffett Associates, Ltd. Seven family members and friends contribute a total of $105,000, while Buffett invests only $100. He now runs his own company and will never work for anyone else again. Later in the year, he opens two more partnerships, eventually bringing the number under his management to three. Years later, they will all be consolidated into one.

1957: Buffett adds two more companies to his collection. He now runs five investment companies from his home.

With Susan about to have their third child, Warren purchases a five-bedroom stucco house on Farnam Street for $31,500.

1958: The third year of the partnership is over and Buffett has doubled the partners’ money.

1959: Warren is introduced to Charlie Munger, who will eventually become Berkshire Hathaway’s vice chairman and an integral part of the company’s success. The two hit it off immediately.

1960: Warren asks one of his partners, a doctor, to find 10 other doctors willing to invest $10,000 each in his company. Eventually, 11 doctors agree to invest.

1961: With partners now worth millions, Buffett makes his first $1 million investment in a windmill company.

1962: Buffett returns to New York with Susie for a few weeks to raise capital from his old acquaintances. During the trip, he raises a few partners and several hundred thousand dollars.

The Buffett Partnership, which started with $105,000, is now worth $7.2 million. Warren and Susie personally own more than $1 million of the assets. Buffett merges all the partnerships into a single entity known simply as Buffett Partnerships, Ltd. Operations are moved to Kiewit Plaza, a functional but not very large office, where they remain to this day. The minimum investment is increased from $25,000 to $100,000.

In the same year, Buffett consults Munger about Dempster, the windmill manufacturing company. Munger recommends Harry Bottle to Warren, a move that will prove very profitable. Bottle cuts costs, lays off workers, and makes the company generate money.

Warren discovers a textile manufacturing company, Berkshire Hathaway, that is selling for less than $8 per share. He starts buying the stock.

1963: Buffett sells Dempster for three times the amount he invested. The nearly worthless company had built a stock portfolio worth more than $2 million during Buffett’s investment period alone.

The Buffetts became the largest shareholders in Berkshire Hathaway.

Due to a fraud scandal, American Express shares fall to $35. As the world sells off the stock, Buffett begins buying stocks in droves.

1965: Warren’s father Howard dies.

Buffett begins buying shares in Walt Disney Co. after meeting Walt personally. He invests $4 million, or about 5 percent of the company.

American Express shares, purchased shortly before, are sold for more than twice the price Warren paid.

Buffett organizes a corporate coup, taking control of Berkshire Hathaway at a board meeting and appointing new chairman Ken Chace to run the company.

1966: Warren’s personal investment in the company reaches $6,849,936.

1967: Berkshire pays its first and only dividend of 10 cents.

In October, Warren writes to his partners and tells them he can find no bargains in the roaring stock market of the 1960s. His company is now worth $65 million.

Buffett is personally worth more than $10 million. He briefly considers leaving investments and pursuing other interests.

American Express exceeds $180 per share, earning the company $20 million on a $13 million investment.

Berkshire Hathaway acquires National Indemnity Insurance on Buffett’s recommendation. He pays $8.6 million.

1968: Buffett Partnership earns more than $40 million, bringing total value to $104 million.

1969: After his most successful year, Buffett closes the partnership and liquidates its assets to his partners. Among the assets paid are shares in Berkshire Hathaway. Warren’s personal stake now amounts to $25 million. He is only 39 years old.

The Berkshire Hathaway years 1970-1989.

1970: The Buffett Partnership is completely dissolved and divested of its assets. Warren now owns 29 percent of Berkshire Hathaway’s outstanding shares. He appoints himself president and begins writing the annual letter to shareholders.

Berkshire earns $45,000 from textile operations and $4.7 million in insurance, banking and investments. Warren’s collateral investments yield more than the company itself.

1971: Warren, at the request of his wife, purchases a $150,000 summer home in Laguna Beach.

1973: Stock prices begin to fall and Warren is elated. Under his direction, Berkshire issues 8% bonds. Berkshire also begins buying shares in the Washington Post Company.

1974: Due to falling stock prices, the value of Berkshire’s stock portfolio begins to fall. Warren’s personal wealth is reduced by more than 50 percent.

The SEC opens a formal investigation of Warren Buffett and one of Berkshire’s mergers. Nothing comes of it.

1977: Berkshire indirectly purchases the Buffalo Evening News for $32.5 million. It later faces an antitrust suit filed by a competing newspaper.

Susie leaves Warren to pursue a singing career, although she does not officially divorce him. Warren is devastated.

1978: Susie introduces Warren to Astrid Menks, a Latvian-American philanthropist and former cocktail waitress, who eventually moves in with him.

1979: Berkshire is trading at $290 per share. Warren’s personal wealth is about $140 million, but he lives only on a salary of $50,000 a year. Berkshire begins buying shares in ABC.

1981: Munger and Buffett create the Berkshire Charitable Contribution plan, which allows each shareholder to donate a portion of the company’s profits to their personal charities.

1983: Berkshire ends the year with $1.3 billion in its corporate stock portfolio.

Berkshire shares start the year at $775 per share and end at $1,310. Warren’s personal net worth is $620 million. He makes the Forbes list for the first time.

Buffett buys Nebraska Furniture Mart for $60 million. Turns out to be one of his best investments.

1985: Buffett finally closes Berkshire textile mills after supporting them for years. He refuses to allow them to drain capital from shareholders.

Buffett helps orchestrate the merger between ABC and Cap Cities. He is forced off the board of The Washington Post. Federal legislation prohibits him from sitting on the boards of both Capital Cities and Kay Graham’s Washington Post.

Buffett buys Scott & Fetzer for the Berkshire collection of businesses. It costs about $315 million and boasts such products as Kirby vacuum cleaners and the World Book Encyclopedia.

1986: Berkshire stock rises above $3,000 per share.

1987: In the immediate collapse and aftermath of October, Berkshire loses 25 percent of its value, falling from $4,230 per share to about $3,170. On the day of the collapse, Buffett personally loses $342 million.

1988: Buffett begins buying Coca-Cola stock, eventually buying up to 7 percent of the company for $1.02 billion. It will prove to be one of Berkshire’s most profitable investments.

1989: Berkshire’s stock rises from $4,800 per share to over $8,000. Warren now has a personal fortune of $3.8 billion.

No retirement in sight for Buffett 1990-2015.

1991: As interim chairman, Buffett drastically cuts Salomon Brothers’ year-end bonuses and takes other actions to prevent Salomon’s financial collapse.

2003: Berkshire ends its charitable contribution program when The Pampered Chef subsidiary is targeted by anti-abortion foes who protest some of the program’s contributions.

2004: Buffett’s wife, Susan Thompson, dies after 52 years of marriage, leaving their three children, Susan, Howard and Peter; she and Warren had been separated since the 1970s.

2006: After Berkshire Hathaway’s significant investment in Coca-Cola, Buffett is a director of the company from 1989 to 2006. He is also a director of Citigroup Global Markets Holdings, Graham Holdings Company, and The Gillette Company.

Buffett marries his longtime romantic partner Astrid Menks at the age of 76.

Buffett announces that he will give his entire fortune to charity, giving 85 percent of his estate to the Bill & Melinda Gates Foundation.

2010: Bill Gates and Buffett work together, forming The Giving Pledge campaign to bring together other wealthy individuals to support philanthropic causes.

2011: Buffett receives the Presidential Medal of Freedom.

2012: Buffett announces that he has been diagnosed with prostate cancer. In July he begins treatment, which is declared effective in November.

2013: Buffett, along with private equity group 3G Capital, purchases H.J. Heinz for $28 billion. Over the next two years, Buffett also acquires Duracell and Kraft Foods Group.

2015: Buffett endorses Hillary Clinton as the Democratic presidential candidate.

The final chapter 2016-2020.

2016: Buffett launches a website called Drive2Vote to encourage his fellow Nebraskans to get out and vote, offering assistance in getting voters registered and providing rides to polling places if needed.

2017: Buffett begins selling some of his approximately 81 million shares of IBM stock, saying he no longer assigns as much value to the company as he did six years earlier. His remaining net shares are about 37 million. He increases his investment in Apple, which becomes Berkshire Hathaway’s largest investment in a company’s common stock. After exercising some warrants, Buffett also becomes the largest shareholder in Bank of America, owning about 700 million shares.

2018: The “Oracle of Omaha” has an estimated net worth of $84.5 billion. Buffett adds JPMorgan Chase and Bank of New York Mellon to Berkshire Hathaway’s investment portfolio.

2019: Buffett’s annual letter to Berkshire Hathaway shareholders is published on February 23. He mentions that Berkshire’s success has been a product of what he calls “The American Tailwind.” In an interview with CNBC on Feb. 25, Buffett admits that he overpaid for Kraft Heinz and that he has no plans to buy or sell shares in the company.23

2020: In his Feb. 22 letter to Berkshire Hathaway shareholders, Buffett addresses succession and says the company’s culture will live on beyond him and Munger. He says the book Margin of Trust, by Larry Cunningham and Stephanie Cuba, will be published at the annual meeting in Omaha on May 2. In addition, Berkshire Hathaway executives Ajit Jain and Greg Abel will receive more exposure and answer questions at the meeting.

The same letter outlines how Buffett intends his Berkshire Hathaway shares to be managed after his death. Each year, a certain number of A shares will be converted into B shares, then distributed to various foundations for ready use. He estimates that it will take 12 to 15 years for the shares he owns to move to the market.

Buffett-2021 successor named.

2021: At Berkshire Hathaway’s annual shareholder meeting on May 1, Munger suggests that Abel will be named Buffett’s successor. Two days later, in an interview with CNBC, Buffett confirmed that the company’s vice chairman Abel, who runs the non-insurance business, will succeed him. However, Buffett added that he has no plans to retire soon.

Trivia.

Why is Warren Buffett called “the oracle of Omaha”?

An oracle is a spiritual medium who can give advice or prophecies. Because Buffett is unusually good at picking stocks that will perform well, and because he has deep ties to the Omaha area, he is nicknamed “the Oracle of Omaha.”

How old is Warren Buffett?

Buffett turned 91 in 2021.

What is Warren Buffett’s net worth?

Forbes estimates that Buffett’s net worth is about $100 billion.

Key points.

Warren Buffett’s net worth exceeds $100 billion, making him the sixth richest person in the world. Often called the “Oracle of Omaha,” Buffett is one of the most influential people in American business. Under Buffett’s leadership, Berkshire Hathaway, originally a textile manufacturing company, has become a multibillion-dollar holding company. Buffett has pledged to donate his entire fortune to charitable causes, pledging 85 percent of his wealth to the Bill & Melinda Gates Foundation.

Source of this article: www.thebalance.com