Last week, it was all about the power lunch with Warren Buffett. The bidding on eBay started with $25,000, in which ended with a winning bid of $3,300,100 – that’s approximately RM13 million. The price was the third highest in the 18 years Buffett has offered the lunch. Winners paid $3,456,789 in 2012 and 2016, which remain the most expensive charity items ever sold on eBay.
Warren’s company owns more than 90 companies including insurance, furniture, railroad, jewellery, utility and candy businesses. Berkshire Hathaway also has major investments in companies including Coca-Cola Co., Apple, American Express and Wells Fargo & Co. But Warren isn’t just a master at making money – he’s good at giving it away too and is now regarded as one of the most generous philanthropists in the world. We have rounded up 5 astonishing facts about the legendary investor and his massive fortune.
Read also: 10 Investment Insights from Warren Buffett
1. At the age of 10, Buffett was having lunch with a member of the New York Stock Exchange
On a trip to the East Coast with his dad, the 10-years-old Warren wanted to see only three things in New York City: the Scott Stamp and Coin Company, the Lionel Train Company and the New York Stock Exchange. The last stop was what made Buffett realised he wanted to organise his life around money.
After lunch at the Exchange with At Mol, a Dutchman who was a member of the Stock Exchange, Warren was awed to see a guy, with a tray that had all these different kinds of tobacco leaves, making a cigar Mr Mol from the leaves he picked. And he thought this is it. It can’t get any better than this. A custom-made cigar. It was mind-blogging for the young Buffett and a vision of his future was planted.
2. Buffett had amassed the equivalent of $53,000 before graduating from high school
At the age of 11, Warren started buying stocks: multiple shares of Cities Service Preferred for $38 a piece. Of course, the young Buffett was also making money with the most traditional of hustles – dutifully delivering newspapers. But even then, he was making more money than his teachers and most adults. He also sold calendars to his newspaper clients, bringing in a little extra.
More impressively, that was just one of his many small businesses. He also sold used golf balls, stamps, and buffed cars. When Buffett was 17, he had his biggest money-making idea: pinball. By the time he graduated from high school, Warren had already bought a 40-acre farm in Omaha, Nebraska, and sold his pinball machine venture for $1,200.
3. He was rejected from Harvard Business School
During his admission interview, Warren relied too much on his knowledge of stocks to make a good impression. Sadly, he got turned down as he had misunderstood Harvard’s mission, which was to turn out leaders. Barred from Cambridge, Warren was forced to look elsewhere.
Leafing through the catalogue for Columbia University, his eyes fell upon a life-changing name: Benjamin Graham. He had just read Graham’s book The Intelligent Investor, which gave him the framework for his investing ever since. So, he applied for Columbia. Graham and his colleagues taught the craft of investing and the young Buffett was the exact craftsman of exceptional ability they were looking for. Warren got in.
4. His idol refused to hire him the first time he applied
Warren originally wanted to work with his idol and mentor Benjamin Graham, but Graham rejected him. The key to success though is persistence. Buffett went back to Omaha but kept pitching ideas to Graham until he eventually hired him. From then, Warren knew that persistence is the only sure-fire method for obtaining success.
5. 99% of Buffett’s wealth was earned after his 50th birthday
Warren is currently 88 years old and has been investing since he was 11 years old. And the 39 years he spent investing is not just a waste of time. Even if Buffett could make less than 1% of his current wealth before he was 50, the last years have the biggest ratio of the total capital. If you are looking at the end of the investment plan, Warren made more profits this last year than then total equity he had when he was 70. It’s an exponential curve upwards when you compound. True compounding only happens when you save and invest. The saving part is the true holy grail of the equation.