Warren Buffett — often referred to as the Oracle of Omaha — turns 87 today. He is the 4th richest person in the World, with a staggering net worth of $76.8 billion. According to Forbes estimates, his company Berkshire Hathaway is valued at $440 billion. Berkshire Hathaway Inc manages a portfolio of more than 60 companies with prominent names such as Coke and Apple in the list. Yesterday, Warren Buffett’s firm became the single-largest shareholder in Bank of America — the second-biggest bank in the US — by exercising its right to acquire 700 million shares at a steep discount. Despite such jaw dropping figures, Warren Buffett is a humble man. He has already given away $32 billion to charity, according to Forbes data.
Born in 1930 in Omaha, Nebraska, Warren Buffett’s tryst with the capital markets began when he was just 11 years old. In the book titled ‘Warren Buffett speaks: Wit and Wisdom from the World’s greatest investor’, author Janet Lowe quotes Warren Buffett, “I’d been interested in the stock market since the time I was 11, when I spent sometime watching the market and marking the board at Harris Upham, a New York Stock exchange firm that was in the same building as my dad’s firm, Buffett-Falk & Company.”
He purchased three shares of Cities Services Preferred at $38 per share. Despite a price drop to $27, a young Warren Buffett held on to the shares and sold them as soon as they reached $40. Soon, Cities Services Preferred stock soared to nearly $200 per share. The experience taught the Oracle of Omaha an important financial lesson: Buy right and sit tight. Warren Buffett is often quoted as saying, “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Robert J Hagstrom writes in ‘The Warren Buffett Way’ — “He (Warren Buffett) would buy a six-pack of Coke at his grandfather’s grocery store for twenty-five cents and sell the individual bottles for a nickel, a 20% return on investment. He also sold, door-to-door, copies of the Saturday Evening Post and Liberty magazines. Each weekend he sold popcorn and peanuts at local football games. With him through all these enterprises was his money changer, taking in dollars and making change.”
The billionaire investor once paid as low as $7 in tax for the full year. Surprised? Then here’s another one: the multi-billionaire earned just $592.5 in taxable income at the time, most of which came from his job as a paperboy. The year was 1944, and Warren Buffett, was a 14-year young boy, delivering newspapers on his bicycle in Washington DC. This job fetched him $364 in taxable income for the year 1944. The 14-year old boy earned $228.5 in interests and dividends in 1944, after venturing into investing little by little as early as when he was just 11 years old.
Buffett is also a very grateful personality as evidenced by his regard for his mentor — Benjamin Graham. In the preface to “The Intelligent Investor’ penned by Benjamin Graham, Warren Buffett writes.”To me, Ben Graham was far more than an author or a teacher. More than any other man except my father, he influenced my life.”
Despite amassing such wealth Warren Buffett continues to impress the world with his humble ways. He lives in a very modest home which he bought for $31,000 in 1958 and he today calls it the best investment he ever made. As Warren Buffett once put it, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”