Warren Buffett is considered one of the best investors of all time. He’s built an enormous fortune and has one of the biggest net wealths of anyone in the world today, thanks to his skill as an investor.
According to Bloomberg, Warren Buffett has a net worth of around $119 billion, putting him firmly in the ranks of the top-ten wealthiest people in the world.
Here we look at how Warren Buffett built his fortune and the factors contributing to his net wealth today.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Warren Buffett’s net wealth
Warren Buffett is one of the most successful investors of all time. Born in 1930 in Omaha, Nebraska, Buffett showed an early interest in business. As a child, he would buy six packs of Coca-Cola for 25 cents and sell each bottle for a nickel, making a tidy profit. He also started a pinball business and sold a newspaper.
Buffett's father was a stockbroker and served as a role model for the young investor. In high school, Buffett started his own business selling golf balls and stamps, and he also worked odd jobs, such as delivering newspapers and washing cars.
After high school, Buffett attended the University of Nebraska but transferred to the University of Pennsylvania's Wharton School of Business. He studied under Benjamin Graham, a renowned value investor who would later become Buffett's mentor.
Benjamin Graham is considered to be the father of value investing. He began his career in finance in the early 1920s, although he quickly realized that most investors were focused on short-term gains and speculation rather than investing in companies with strong fundamentals, such as robust balance sheets.
With this knowledge, he went on to develop his own investment philosophy, focusing on buying undervalued stocks. He believed buying equities cheaply, holding them for the long term and selling them when the market had realised the value was a great way to make money. Put simply, Graham believed that by carefully analyzing a company's financial statements and other fundamental data, he could identify stocks trading at a discount to their true value.
This mentality shaped Warren Buffett's view of the world from a young age.
In 1951, Buffett received his master's degree in economics from Columbia University. He then worked at his father's brokerage firm before starting his investment partnership in 1956.
Warren Buffett's early partnerships significantly influenced his success as an investor and businessman. In the 1950s and 1960s, Buffett formed several partnerships that allowed him to pool his resources with other like-minded investors. These partnerships enabled him to invest in larger and more complex deals than he would have been able to do on his own.
Warren Buffett buys Berkshire Hathaway
One of these deals was Berkshire Hathaway. When Buffett first started buying the stock in the late 1959s, the business was a struggling textile manufacturer. The young investor decided to try and buy enough shares in the business to force management to buy him out at a higher price - earning a handsome profit in the first place.
Management refused, and Buffett lashed out, buying control and kicking the former management out.
Over the next few years, Warren Buffett wrestled with the business. He kept a tight leash on costs and used any excess cash to expand and diversify.
He started building his empire with the acquisition of two small insurance groups. These companies gave Warren Buffett an edge. Insurers have large portfolios of investments, giving Buffett a lot of flexibility around where and when he could invest. Over the years, the company has continued to acquire other insurance companies, including GEICO and General Re.
Despite these additional investments and diversification, Berkshire’s insurance businesses remain at the core of the group today. Berkshire Hathaway also owns a load of other well-known companies, including the battery brand Duracell and Dairy Queen ice cream parlours.
Warren Buffett’s investing method
Buffett is known for his successful investing style. Historically, he has searched for undervalued companies that have a strong foundation and a competitive edge within a specific market. He then invests in these companies for the long term.
As a result, he has made impressive returns. Some of Berkshire Hathaway’s famous investments include Apple Inc, Coca-Cola and American Express.
Warren Buffett’s charitable nature
While Berkshire Hathaway's success can largely be attributed to Buffett's investment strategies, the company also has a reputation for ethical business practices. Buffett has long emphasized the importance of integrity in business, and the company's annual shareholder meetings are known for their transparency and open communication.
Warren Buffett is known for his philanthropic efforts, including his commitment to giving away the majority of his wealth through the Giving Pledge - a commitment by some of the world's wealthiest individuals and families to give away the majority of their wealth to address society's most pressing problems.
Buffett was one of the first signatories of the pledge, and he has encouraged other billionaires to follow his lead. Through his generous donations and advocacy for charitable giving, Buffett has become a role model for others who want to use their wealth to positively impact the world.
-
-
Act now: First Direct’s £175 switching bonus ending soon
First Direct has launched a £12,500 prize draw on top of its £175 cash bonus - but they both finish soon, so you’ll need to be quick
-
Credit card providers slash 0% balance transfer deals
Customers face a double whammy of rising interest rates and shorter 0% balance transfer periods. We look at what’s going on in the credit card market and why you’ll need to act fast to get the top 0% balance transfer deal
-
UK wages grow at a record pace
The latest UK wages data will add pressure on the BoE to push interest rates even higher.
-
Trapped in a time of zombie government
It’s not just companies that are eking out an existence, says Max King. The state is in the twilight zone too.
-
America is in deep denial over debt
The downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?
-
UK economy avoids stagnation with surprise growth
Gross domestic product increased by 0.2% in the second quarter and by 0.5% in June
-
Bank of England raises interest rates to 5.25%
The Bank has hiked rates from 5% to 5.25%, marking the 14th increase in a row. We explain what it means for savers and homeowners - and whether more rate rises are on the horizon
-
UK wage growth hits a record high
Stubborn inflation fuels wage growth, hitting a 20-year record high. But unemployment jumps
-
UK inflation remains at 8.7% ‒ what it means for your money
Inflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
-
VICE bankruptcy: how did it happen?
Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
