Born on August 30, 1930, Warren Buffet was the son of a congressman and former stock broker. As he grew up, it became obvious that he was good at finances. When he was just six years old, Warren Buffet started purchasing six packs of soda and selling them individually.
At the age of eleven, he used his earnings to buy shares in Cities Service Prefered. Although it dropped to $27 right away, it ended up rebounding to $40. After the rebound, he sold it and learned his first lesson when he saw the stock rise afterward to $200. Waiting and patience were the first tools he gained from this early lesson.
When Warren Buffett graduated from high school, he was not expecting to go to college. At the insistence of his father, he used his earnings from delivering newspapers to go to Wharton Business School.
After his father lost the next congressional race, Warren Buffet returned to Omaha and enrolled at the University of Nebraska-Lincoln. Although he worked full-time during school, he still managed to graduate in three years. Following his undergraduate degree, he pursued graduate studies at Columbia University.
While there, he studied under the famed investor, Benjamin Graham. Ben Graham would become his mentor and help Buffett learn how to invest in low cost stocks.
After graduating, Buffet returned to his father's brokerage house and became married. Their early years were marked by poverty. The couple's tiny apartment was filled with mice. Without the extra money for a crib, they transformed a dresser drawer into her bed.
Whenever Buffet had extra money, he placed it in a Texaco station and property. He started teaching at the University of Omaha until Ben Graham invited him to work together.
While he worked for Graham, Buffet learned about value investment and the importance of a company's management. All of his extra earnings went into a savings account and investments. By 1956, Buffett had accrued a total of $140,000.
With his savings, Warren Buffett found seven partners to create Buffett Associates. The company's earnings grew from $105,000 to $300,000 within a year. Using some of the funds, he purchased a house that he ended up keeping for the rest of his life.
Meanwhile, his partnership gained 251 percent in profits over five years and Warren Buffet became a minor celebrity in his hometown. In 1962, he had a personal stake of $1 million in the partnership.
Ten years after the partnership started, assets had grown by 1,156 percent. At this point, Warren Buffet closed off the partnership to new accounts. By 1969, Buffett closed the partnership and liquidated the portfolio because there were no longer any bargains in the marketplace.
The only portfolio he kept was Berkshire and Diversified Retailing. Buffett kept 29 percent in the Berkshire Hathaway stock. Buffett changed out the management at Berkshire and refused to grant stock options. Before long, he became the Chairman of the Board.
Since the 1990s, Berkshire Hathaway stock has reached as high as $80,000 a year. By 1999, Buffet became convinced that the dot-com bubble would burst. With this in mind, he invested in different stocks and continued to boast earnings even when technology stocks dropped.
Throughout his investing career, Buffett through his brand of investing style has managed to acquire stakes in successful companies. These investment has produced great returns for him and his shareholders. Among the notable investments are Coca Cola, American Express and Wells Fargo.
Warren Buffett and Bill Gates sitting down to play a game of bridge with world champion Bob Hamman
Today, Warren Buffett is among the wealthiest people on earth. He is consistently ranked among the ten richest people in the world. Currently, according to Forbes, he is the 4th richest person in the world with a net worth of $62.7 Billion.
Buffett’s name will go down in history as the greatest stock investor of all time. Even in his eighties, Buffett has not showed any signs of slowing down. By the way, Berkshire Hathaway’s stock is now the most expensive stock in the world in terms of price.
Guess how much does it cost to buy an A-Class share? You would need at least $190,000 just to own one A-Class share in Buffett’s company.
There are truly thousands of gems of wisdom that we can glean from the life of Warren Buffett. Here are a few of them: