Imagine being one of the top five richest men in the world with an annual salary of $100K, which is less than most middle class families make. It sounds almost mythological, but from soda cans to stocks, it is the story of Warren Buffett - the billionaire who “lives on a dollar.”
From the ripe age of six, Warren had already shown signs of his money-smart inclinations. He began reselling soda cans to his school peers for a higher price, allowing himself to reap a five-cent profit per can. Already beginning to stand out from the pack, Warren did not stop there.
At the stark age of eleven, he bought his first three stocks at Cities Service for $38 dollars each. After the price rebounded, Buffett promptly sold the stocks once they reached $40 in value. Cities Service would end up growing, making young Buffett regret his decision, but investing sparked a love of finance that Warren still practices at 89 years old.
As a kid, he ended up making over $1,000 dollars in profit, but he didn’t start formally investing until he turned 25. After attending college and settling down, Buffett began his famous journey to billions.
While he was working as a stock analyst, Buffett began accumulating personal capital through investing. When he had around $140K, he bought himself a house- the easiest way to build wealth- and used some of the leftover money to fund his new venture: a financial consultancy firm. Though the firm started with only a pool of friends, family, and associates, Buffett’s clients soon grew to include several successful investors and companies. The business model was simple; Buffet would get a commission for the millions of dollars he brought his clients. Ten years after opening the firm, his net worth was $25 million (a stark contrast to his original net worth of $140 K). He had to liquidate his partnerships, but this wealth that compounded over 50 years is one of the reasons Buffett is so wealthy today.
The second reason - and the most well-known - is Buffett’s investments in Berkshire-Hathaway, a textile company. After ending his firm, Buffett still held 29% of the stock at Berkshire Hathaway with heavy influence in the company. Later down the line, BH acquired See’s Candies and the company continued to grow in net worth. Over the course of many years, Buffett had invested around 15 million dollars in BH and it was essentially his sole source of income at the time.
Today, Berkshire Hathaway also owns successful companies like Geico, BNSF Railway, Dairy Queen, Duracell, See’s Candies and NetJets, and has major stock holdings in Apple, Bank of America, Coca-Cola, American Express and Wells Fargo. Warren Buffett continues to be an excellent businessman and keen investor. Globally, he serves as a living symbol of the pinnacle every investor dreams of reaching.
So, for our young audience, I’d like to end on a question: What’s stopping you from becoming the next Warren Buffett?