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One of the richest businesspeople, American (Omaha) Warren Buffet, in his 80’s, is looked to to see if there is anything we can learn from his words or his life.
Some notable points:
Warren buffet earned 99 percent of his wealth after his 50th birthday. According to investor Dan Kanivas, although this may seem unintuitive to many of us, this phenomenon was “essentially a preordained outcome for him” because of the nature of compound investment.
Note, too, that Buffett at age 50 had been investing for 39 years. Buffett began making money selling chewing gum, soda, and magazines door-to-door, and worked in his grandfather’s store. He also sold newspapers, golfballs, stamps, and detailed cars. When the investor filed his first tax return (in 1944 when he was around 14 years old), he took a $35 deduction for the use of his bicycle and watch on his paper route.
When Buffett was 11, he bough 3 shares each for himself and his sister of Cities Service Preferred.
In high school, he invested in a business owned by his father and bought a farm worked by a tenant farmer.
When Buffett finished college, he had over $90,000 in savings (in 2009 dollars). Buffett is known for his value investing and personal frugality.
Although Buffett is among the people who control the most wealth, he has pledged to give away 99 percent of his wealth to philanthropic causes, primarily the Gates Foundation. The investor gives his money mostly to charity, not his children.
Bill Gates met him for the first time only 5 years ago and did not think the two businesspeople had anything in common. Gates had scheduled his meeting only for half hour, but when he met Buffett, the meeting lasted for 10 hours and Bill Gates became a devotee of Buffet.
As for stocks, the investor owns relatively few, and the stocks he owns, he tries to hold “forever.”
Buffett has been remarked for his reluctance from public speaking, jet set socializing, private jet charter flying (although he owns the world’s largest private jet company). Instead, the investor relaxes at the end of a day by making popcorn and watching TV. He also plays bridge online several times per week. At least 4 times per week, it has been reported.
Some business advice from Warren Buffett: Here’s the 2 rules he gives to his CEOs (his company, Berkshire Hathaway, owns 50-60 companies, and he writes the CEOs of these companies only once per year, giving the CEOs goals for the year):
Rule number 1: Do not lose any of your shareholder’s money.
Rule number 2: Do not forget rule number 1.
This could be good advice for smaller business owners, who are looking for a small business advisor, especially if their business grows enough to have shareholders.
Tips by Warren Buffett (actually, I’m not sure if these are based on direct quotes, paraphrases, or just lessons based on Buffett’s words, but here is a set of basic investment ideas widely circulating):
On Earning: “Never depend on a single income; make investments and create a second source.”
On spending: “If you buy things you do not need, soon you will have to sell things you need.”
On savings: “Do not save what is left after spending, spend what is left after saving.”
On taking risk: “Never test the depth of a river with both feet.”
On Investment: “Do not put all your eggs in one basket.”
On Expectation: “Honesty is a very expensive gift, do not expect it from cheap people.”
Maybe we should also note that Buffett himself had teachers, and the one he usually mentions is his respected investment/ business teacher Benjamin Graham, who wrote a few books in the 30s and 40s that are still looked to today for information on security analysis and value investing.
