CollegeInvestr pushes college students to take control of their money and to become financially successful. In order to achieve this goal it's important to understand what we're striving for, first.
Reviewing the success stories of the financial world helps remind us what we're trying to achieve. Warren Buffett is arguably the greatest investor of our time and there are many things we can learn from him.
Warren Buffet, The Oracle of Omaha
The Early Life of Warren Buffett
Warren was born in Omaha, Nebraska in 1930. His father (Howard Buffett) was elected to congress in 1942 and the Buffett family moved to Washington D.C. There, Warren graduated high school and his yearbook picture read "Likes math; a future stockbroker".
Buffet was interested in business from a very young age and he spent much of his younger years starting small businesses. As a sophomore in high school, Warren and a friend bought a $25 pinball machine and placed it within a barber shop. After buying a couple more pinball machines and expanding their business, Warren and his friend sold their pinball empire for $1200.
By the time Warren graduated college, he had collected over $90,000 in savings (2009 dollars).
Pre-Millionaire Warren Buffet
Buffett worked at Buffett-Falk & Co as an investment salesman from 1951-1954. Buffett-Falk & Co was Warren's dad's investment business.
In 1954 Warren quit his dad's investment business and went to work for Benjamin Graham at Graham-Newman Corp. There he was a securities analyst. His starting salary was $105,000 (2012 adjusted dollars).
Ben Graham is known as one of the greatest economists and investors of all time. He is widely respected as the inventor of value investing. In 1956 Ben Graham decided to retire and close his partnership, Graham-Newman Corp.
At the time of the Graham-Newman Corp closing, Warren Buffett had accrued 1.47 million dollars (2012 USD) and he started Buffett Partnership Ltd.
Millionaire Warren Buffett
In 1965, Warren Buffett and his partnership started aggressively buying shares of the then textile company Berkshire Hathaway. In a board meeting later that year, Warren took control of the company and named a new president. He later converted Berkshire Hathaway into an insurance company.
Hochschild, Kohn and Co, a privately owned department store, was purchased by Buffett in 1967.
Warren started writing his famous letters to shareholders in 1970 and the Buffet Partnership was dissolved. The same year Warren established the name Berkshire Hathaway Inc as the official name for his investment empire.
In 1973 Buffett and Berkshire Hathaway purchased stock in the Washington Post Company, and he later joined their board.
ABC, the media giant, was purchased by Capital Cities in 1979. This shocked the media world because Capital Cities was nearly four times smaller than ABC. Warren Buffett helped finance the deal in return for a 25% stake in the new, combined company.
Berkshire Hathaway purchased 7% of the Coca-Cola Company in 1988 at a whopping value of 1.02 billion dollars. Berkshire still holds this investment and it has been one of their biggest grossing assets to date.
Billionaire Warren Buffett
Warren Buffett became a true billionaire in May of 1990.
Since then Warren and Berkshire Hathaway have purchased these notable companies (or portions of them):
- 1.65 billion dollar stake in Apple
- 16.47% of American Express
- 647 million dollar stake in Costco
- 6.95% of Deere & Company (John Deere)
- 243 million dollar stake in Twenty-First Century Fox
- 325 million dollar stake in General Electric
- 3% of General Motors
- 2.235 billion dollar stake in Goldman Sachs Group
- 28% of Kraft Heinz Co
- Almost 16% of Phillips 66
- 838 million dollar stake of Visa
- 700 million dollar stake of Verizon
- 9.5% of Wells Fargo & Co
- 2.865 billion dollar stake of Walmart
Read these articles if you're interested in collecting large amounts of wealth:
- Beginner Invest: How to Start!
- Why Investing is So Important for Young Adults
- 5 Things Every New Investor Should Know
Recent Warren Buffett News
Warren Buffett in 2006 announced that he would be giving 85% of his Berkshire Hathaway holdings to five foundations in annual gifts of stock. Each singular stock is worth over $230,000.
In 2007 Warren announced he'd be looking for a successor to take over his empire. Buffett was looking at selecting Lou Simpson, who runs investments at GEICO, but Lou was only 6 years younger than Warren and was passed over.
During the financial crisis (2008), Berkshire Hathaway purchased 10% of Goldman Sachs in order to save it from going under. According to Forbes.com, Warren Buffett lost $25 billion in a 12 month span. (2008-2009)
After a long road to recovery, Q2 of 2014 saw Berkshire Hathaway net a profit of $6.4 billion, The largest net profit margin it had ever seen.
In April 2012, Warren was diagnosed with prostate cancer, but by September of that same year, Buffett announced that he had completed his treatment and was cancer free.
Warren is an inspiration to all investors throughout the industry. His example of hard work, honesty, and smart value investing has changed the landscape of investing permanently. We appreciate his contributions to our economic world and we look for big things to come from his legacy, Berkshire Hathaway.
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