Warren Buffett Biography
  1. Warren Buffett: His Life and Education
  2. Warren Buffett: Success Story
  3. Warren Buffett: Net Worth & Current Influence
  4. Warren Buffett: Most Influential Quotes

Warren Buffett: His Life and Education

Warren Edward Buffett was born in Omaha, Nebraska to Howard Buffett, a stockbroker and later Congressman, and Leila Stahl Buffett on August 30th 1930. As a child, Buffett reportedly showed interest in stocks, writing stock prices on the chalk board in his father's office. Legend has it that he told his childhood friend if he wasn't a millionaire by the time he was thirty, he would jump off of the tallest building in Omaha. When Buffett was 11-years-old he visited the New York Stock Exchange and bought his first shares: three shares of Cities Service Preferred (an oil and gas concern) for himself and three for his sister Doris.

Nebraska was hit hard by the effects of the Great Depression. Like many children of the Depression, Buffett grew up to know the value of the dollar. He became so frugal that when he moved to New York for business school, he lived at the YMCA. By the time he was 13 years old, he figured it was time to get a job and began to deliver newspapers – slowly at first but eventually working both morning and afternoon routes. In 1944, Warren filed his first tax return and reached his short-term goal of having $1,000.

Buffett spent his formative adolescence in Washington D.C. where he graduated from Woodrow Wilson High School. In grade school and high school Buffett showed his precocious proclivity for business by delivering newspapers, selling stamps, Coca-Cola Co. (KO), golf balls and magazines door-to-door, and editing a horse racing tip sheet called Stable-Boy Selections. During this period, Warren started a pinball leasing business. He and a business partner bought cheap pinball machines, got them in working order and installed them to get what were, quite possibly, his high school classmates' coins.

By the time he was 15, Warren had amassed $2,000 and used it to buy a 40-acre farm in Nebraska. This farm paid his way through the University of Pennsylvania before he eventually transferred and graduated from the University of Nebraska, Lincoln with a Bachelor of Science degree, after which he applied to Harvard Business School. After being rejected by Harvard, Buffett matriculated at Columbia Business School, where he studied with legendary value investor Benjamin Graham. He graduated in 1951 with an MS in Economics.

Degree in hand, Warren returned to Omaha for short while where he studied public speaking and began teaching investing at the University of Nebraska, Omaha. In 1954 Warren moved his new wife Susan and his young daughter to New York where he began working for his idol Benjamin Graham.

Finally after years of moving from city to city, Warren permanently returned to Omaha where he soon bought himself a modest house. For someone as frugal as Warren, the $31,500 price tag was difficult to swallow and he nicknamed it Buffett’s Folly.

From 1951 to 1956 Buffett was an investment salesman and a securities analyst. By '56, Buffett had $174,000 and a house, and in his own words, he decided to retire at twenty-six, figuring he could make enough money from his investments to live a private life. he realized, however, that to meet his goal of becoming a millionaire by the time he was thirty-five, he would have to be more active. Fortunately for his future partners and Berkshire Hathaway (BRK-A) shareholders, Warren changed his mind and went after the opportunity for his biggest success. In 1956 he started Buffett Partnership Ltd.

Buffett's first, most famous and formative deal was his acquisition of Berkshire Hathaway in 1964. The company started life in the 1830s as the Valley Falls Company, a textile manufacturer, that became the Berkshire Fine Spinning Associates in 1929 and merged with the Hathaway Manufacturing Company in 1955. After the merger, Berkshire Hathaway was a profitable business with millions in revenue, twelve thousand employees and fifteen factories. Buffett made his first investment in the company in 1962.

In June of 2006, Buffett announced his intention to give away most of his fortune to charity. The bulk of his donation was announced in a letter to the Bill and Melinda Gates foundation, which has received 185 million shares of Berkshire Hathaway so far at a market value of 28.3 billion in 2014.

Buffett told Charlie Rose in 2006, "I don't believe in dynastic wealth." Buffett's belief that people who inherit wealth are "members of the lucky sperm club" and his liberal politics persuaded him not to give his fortune to his children. Buffett also favors inheritance taxes and higher taxes on capital in general.

Buffett's first wife died in 2004, and in 2006 he married Astrid Menks with whom he "had a relationship of 20 years," according to the New York Times. Though Warren Buffett and his first wife Susan had lived apart since the late 1970s, they remained married, and Susan Buffett encouraged his relationship with Ms. Menks.

Warren Buffett: Success Story

  1. Warren Buffett: His Life and Education
  2. Warren Buffett: Success Story
  3. Warren Buffett: Net Worth & Current Influence
  4. Warren Buffett: Most Influential Quotes
RELATED TERMS
  1. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  2. IRR Rule

    A measure for evaluating whether to proceed with a project or ...
  3. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and ...
  4. Percentage Change

    Percentage change is a simple mathematical concept that represents ...
  5. Qualitative Analysis

    Securities analysis that uses subjective judgment based on nonquantifiable ...
  6. Discounted Cash Flow (DCF)

    Discounted cash flow (DCF) is a valuation method used to estimate ...
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center