Warren Buffett’s mantra to mint money!

Posted: January 7, 2009 in My Heros


A frugal billionaire

He bought his first share at age 11.

He bought a small farm at age 14 with savings from delivering newspapers.

He is the world’s richest man, the living legend, Warren Buffett!

One of the most successful investors the world has ever seen, Warren Buffett is today the richest man on the planet, according to Forbes magazine’s annual list of billionaires.

Chairman of the Berkshire Hathaway, Buffett’s wealth jumped by $10 billion jump to hit $62 billion during 2007. Buffett has beat friend — and Microsoft boss — Bill Gates’ 13-year reign as the richest man. Buffett’s journey to become the world’s richest is truly inspirational.

A staunch follower of value investing, he started with an initial fund of $105,000 in 1956, the rest is history. Over the next five decades, Buffett’s wealth rose to $62 billion.

But he is not the one to flaunt his riches, simple and down-to earth, Buffett continues to live in the same house in Omaha that he bought in 1958 for $31,500. He says that he has everything he needs in that house. His house does not have a wall or a fence.

The early years

As a young boy, Buffett, the son of a stockbroker always yearned to make more money. He started making pocket money by delivering newspapers.

When he was just eleven years old, Buffett bought his first stock. He purchases 6 shares of Cities Service preferred stock: 3 shares for himself, 3 for his sister, Doris, at $38 per share. The stock fell to $27 but went up to $40. Warren and Doris sold their stock for a small margin. Immediately after that, the stock zoomed to $200 per share, much to his disappointment. That’s when he learnt a very important lesson in life: Patience pays!

A self-made billionaire, Buffett has a great memory and was always good at mathematics and business.

At the age of 14, with the money he had saved from part-time businesses and delivering newspapers, he bought a Nebraska farmland, which he later leased to a farmer.

After his graduation from the University of Nebraska, he pursued further studies at the Columbia Graduate Business School under Benjamin Graham. He started his career with Graham where he learned a lot about stock investment.

After Graham retired, Buffettt started a company in his native place Omaha funded by family and friends. It turned out to e a great success. Later, he set his eyes on buying stocks in Berkshire Hathaway.

Soon, Warren Buffettt has a majority holding in the company. He set out to revive the company which was hit by high manufacturing costs. He helped Hathaway buy out two Nebraska insurance companies. This was the turning point in Berkshire Hathaway. Since then there has been no looking back� His friendship with lawyer and investor Charlie Munger further turned around his fortunes as well as the company’s. Munger joined Warren at Berkshire Hathaway as its vice-chairman.

Under their leadership the company became well-established. Today with 2,17,000 employees, the company boast of revenues to the tune of $118.245 billion and net income of US$13.213 billion.

Berkshire Hathaway, headquartered in Omaha, Nebraska, U.S., manages a number of subsidiary companies. Berkshire Hathaway’s core business is insurance, including property and casualty insurance, reinsurance and specialty nonstandard insurance.

Buffett had once told a friend that he will be a millionaire by the time he turns thirty. In 1983, Berkshire shares is at $775 per share, by the end of the year it rises to $1,31 and Buffettt’s personal net worth zoomed to $620 million. He makes it to the Forbes richest list for the first time.

  1. Great Article. Graham is considered the first proponent of Value Investing, and I am a great fan of Benjamin Graham myself, I follow most of his rules, I started a site on value investing. The site mainly screens out Low PE, Low PB, High Divident Yeild. Low PB+ High Div etc.. for the India markets. I really appreciate the effort you have put in your blog. Best Wishes.

  2. Rahul says:

    Great Article 🙂

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