Warren Buffett-Inspiring Investors Who Read A Lot (17) | booksbackinyourlife

Warren Buffett-Inspiring Investors Who Read A Lot (17)

Warren Buffett


Warren Buffett is one of the most famous and successful investors of our time. Who would have thought that at the time of the Great Depression the most important investor of all times would see the light of day. Warren Edward Buffett was born on August 30, 1930 in Omaha, Nebraska. He reads 500 pages a day and has been doing so for several decades.

Childhood

Warren, like most children, was very inquisitive and curious about life. He has been able to maintain this hunger for knowledge to this day. As the son of a broker, he came into contact with the capital markets at a very early age. Warren saw himself as an entrepreneur even as a young boy. At the age of seven, he read the book A Thousand Ways to Earn $1000 (Note that the book is probably out of date today.).

Warren Buffett
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With this inspiration, his first businesses began as a newspaper carrier and seller of gum and Coca-Cola bottles. Warren was very proud of those first pennies. Now some would think that Warren traded his childhood for money. However, I believe that he was doing exactly what gave him immense pleasure: Making deals and investments. As he sold more and more candy and put his pennies in his coin changer, he wasn’t just pocketing money. He was building a primal confidence in his abilities and coming to the realization that diligence and discipline would eventually pay off. At age eleven, he bought his first stocks with those savings.

Youth

Warren’s parents gave him a lot of freedom to develop. He had incredibly strong ambitions to develop as an entrepreneur. He tried a lot of things. He sold stamps and repaired cars. He worked for his grandfather, who had a grocery store. He sold golf balls on golf courses until the police ordered him off the course because it was illegal. Such small slips can be forgiven by a teenager. In all these jobs, Warren gained important experience as an entrepreneur.

He made mistakes and got better. He then also handled his savings wisely, building passive income by buying used pinball machines and setting them up in local barbershops. Warren had the ability to think around corners and build new businesses.

At 19, Buffet earned his Bachelor of Science in Buisness of Administration from the University of Nebraska. He then attended the Business School of Columbia, where one of his role models Benjamin Graham also taught. The book the intelligent investor is considered a standard work for all stock market investors. Benjamin Graham the forefather of value investing, was a major influence on Warren’s career.

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Warren Buffet as a young adult

Warren was afraid to speak in public as a 20-year-old. However, self-confidence and also other social skills play a crucial key role in the business world. Warren reflected on how to work on his weaknesses. So he signed up for Dale Carnegie’s public speaking course. Dale Carnegie was a famous motivational and communication trainer. His most famous works are How to Win Friends and Influence People and how to Stop Worrying and Start Living.

In retrospect, that $100 was his best investment yet, considering that after the course he won over his sweetheart, Susan Thompsan. In 1952, the two married and had their first child Susan Alice a year later.

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Warren earned a master’s degree in economics in 1951. He then attended the New York Institute of Finance.

In 1954, Warren got a job with Benjamin Graham in a management position. He worked there until Benjamin Graham retired to his personal life. Warren then formed his own first limited partnership, Buffett Partnership, at the age of 25.

Warren’s investment pools made an average annual return of 29.5% from 1956-1969. This turned US$10,000 into US$288,000. After deducting Buffett’s performance bonus, investors still had an annual return of more than 23% resulting in a return of 150 000 US dollars. In the same period, the Dow Jones rose from 500 points to 1000 points. An investment would have doubled the capital.

It is amazing how small this movement looks in retrospect when we compare it to the later price movements.

For the same return on an investment in the Dow Jones Index, investors would have had to wait 28 years longer. By 1998, your invested capital would also have increased fifteenfold. Investing in a safe index with a lot of time can also give an impressive return. Keep in mind, however, that the dollar is also steadily losing purchasing power.

10,000 US dollars in 1956 had about the same purchasing power as 60 000 US Dollars in 1998.

10 000 US Dollars back in 1956, would have a purchasing power of 100 000 US Dollars today (2021).

Here is a link for the US Dollar inflation calculator

You can find more graphs at finanzen.net

Amazing how the Dow Jones has performed. Adjusted for inflation, your capital would have increased by 620% (With inflation 6200%).

Warren has always had a very long time horizon. If it’s only one thing you take away from this article, let it be Warren Buffet’s long time horizon. That’s how you’ll climb the steps of your financial staircase safely and swiftly 🙂

,,You can sit in the shade today because someone planted a tree many decades ago.“

,,If you’re not willing to own a stock for ten years, don’t even think about owning it for ten minutes.“

Warren Buffett

Take Warren’s advice to heart and you’ll see how it gives your life’s path a positive turn.

Warren became a millionaire in 1962 at the age of 32. According to the 2020 Forbes list, his wealth in 2020 was 67.5 billion US dollars. You can watch his journey there in the very nice documentary by HBO Documentary HD. Here Warren Buffett personally tells his life story. You can find the link to the video below.

Warren the humble philanthropist

Warren is one of the ten richest people in the world, but he still lives in the same house he bought in 1958 for 31,500 US dollars. If you put his wealth in relation to his lifestyle, you could call him the most frugal person in the world.

Warren does not need to spend a lot of money on status symbols. He loves to work and will remain CEO of Berkshire Hathaway for a very long time.

Warren founded the Giving Pledge campaign in June 2010 together with Microsoft founder Billgates. In this campaign, wealthy people are encouraged to donate a portion of their wealth to charity.

More than 204 billionaires have now joined the Giving Pledge and pledged to donate half their wealth. Together, they come to more than a trillion U.S. dollars.

Warren has made a pledge to donate 99 percent of his wealth to charity.

Now you are asked

Your thoughts are welcome in the comments section

What is your opinion?

Please write your opinion in the comments

Thanks a lot

What do you think of Warren Buffet? What life wisdom comes to mind when you think of Warren Buffett?

Links:

Warren Buffett – HBO Documentary HD veröffentlicht vom Youtube Kanal ADVEXON TV

Book Recommendation:

If you want to learn even more about Warrent Buffett, I can recommend the book about his biography. This blog article is just a taste of a very impressive life story.

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Veröffentlicht von Chris

Monthly one blog articel about reading, growth or inspiring ideas (in english and german). I am like you. I see freedom as the highest basic right. My goal is to provide added value to our society.

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