Warren Buffett has never been a big spender. He still lives in the same house in Omaha he bought for $31,500 in 1958; he still pays himself just $100,000 a year; he's not a collector of art or gadgets or football clubs. His only concession to extravagance is his private jet, which he calls The Indefensible.
His canniness with money extends to his family, as Alice Schroeder shows in a new biography. When his daughter, Susie, was in her 30s, she "struggled with a few extra pounds. Her father made a deal in which, for losing a certain amount of weight, she could shop for clothes for a month, no limit. The only catch was that she had to pay him back if she regained the weight within a year."
Susie shed the pounds and her mother, also called Susie, sent her credit cards with a note: "Have fun!" The daughter duly went out and spent $47,000 in 30 days. Buffett paid up, though not, we're told, without moaning about it "like mad" to his friends. I believe it.The story is typical of Buffett: a man who, in his financial dealings, never gives away anything for nothing. As one of his friends put it, he is "the master of win/win... He doesn't do anything that isn't a win for him."
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Lakshmi Mittal's lost billions
I doubt it will rouse much sympathy from householders struggling with their mortgage payments, but Britain's billionaires have been hit hard by plummeting prices. The biggest loser is Britain's richest man Lakshmi Mittal, who, says The Sunday Times, has seen more than £16bn wiped off his fortune by falling stockmarkets in just four months.
Fortunately Mittal, like Buffett, is not known for lavish spending. "He's very careful with money, he knows where most of the pennies go," says Tim Bouquet, who has written a book on him. "He likes to joke that on his plane he serves pizza rather than champagne. Mittal's idea of a good time is to order a Chinese takeaway from Zen Central in Mayfair."
I always feel a twinge of irritation when rich people announce that they won't be leaving their fortunes to their children. Nigella Lawson did it early this year, telling an interviewer: "I am determined that my children should have no financial security. It ruins people not having to earn money." Now Andrew Lloyd Webber, who's worth £750m, takes a similar line to the Daily Mirror: "I am not in favour of children suddenly finding a lot of money coming their way because then they have no incentive to work."
Neither Lawson nor Lloyd Webber intend to leave their children hard up, of course, so we shouldn't be too exercised. But wouldn't these highly successful parents be better to keep quiet about their plans? Whatever they say, the children of rich people don't have the same incentive to make money as the children of poor people and nothing will alter that fact.
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