Rich Dudes│How Warren Buffett’s Net Worth Went From $10K to $114B

Warren Edward Buffett AKA “The Oracle of Omaha'' is a highly successful investor, widely recognized for his long-term investment strategies.

Warren Buffett's net worth sits at $114 billion—despite his immense wealth, he maintains that money cannot buy happiness and pledged to donate 99% of his fortune to charity through the Buffett Foundation.

Born in Omaha, Nebraska, in 1930, Buffett began his investing journey at a young age. As a teenager, he made his first investment in the stock market, and by the age of 20, he had already accumulated a net worth of $9,800.

In interviews and speeches, he has emphasized the importance of living a simple life and giving back to society. Through his foundation, he has donated billions of dollars to various causes, including education, health, and poverty alleviation. He has also encouraged other billionaires to follow in his footsteps and donate a significant portion of their wealth to charity.

In addition to his investment acumen and philanthropy, Buffett is known for his love of soda—he drinks multiple cans of Cherry Coke daily, which suggests he maintains a high energy level to continue making investment decisions.

Let’s capitalize on that caffeine rush to deep dive into the investment portfolio of Berkshire Hathaway's chairman Warren Buffett and how he managed to amass a $114 billion net worth and earn the “Oracle of Omaha” monicker.

Warren Buffett net worth at a glance

Warren Buffett started investing at the age of 11 when he bought six shares of Cities Service preferred stock with his savings. Buffett was born in Omaha, Nebraska, the second of three children and the only son of Leila and Congressman Howard Buffett.

Young Buffett was interested in business and investing at a young age and was inspired by the book One Thousand Ways to Make $1000 that he borrowed from the public library when he was seven. Buffett made money by selling chewing gum, Coca-Cola, weekly magazines, and delivering newspapers while still in high school.

Buffett's interest in the stock market and investing dates back to his schoolboy days. His father took him to visit the New York Stock Exchange when he was just 10 years old. Buffett bought three shares of Cities Service Preferred for himself and three for his sister Doris when he was 11. By the time he finished college, Buffett had amassed $9,800.

After being rejected by Harvard Business School, Buffett enrolled at Columbia Business School upon learning that Benjamin Graham, a well-known investor, taught there. He earned a Master of Science in Economics from Columbia in 1951. After graduating, Buffett attended the New York Institute of Finance.

Buffett worked from 1951 to 1954 at Buffett-Falk & Co. as an investment salesman; from 1954 to 1956 at Graham-Newman Corp. as a securities analyst; from 1956 to 1969 at Buffett Partnership, Ltd. as a general partner; and from 1970 as chairman and CEO of Berkshire Hathaway Inc.

In 1951, Buffett discovered that Graham was on the board of GEICO Insurance. On a Saturday, he took a train to Washington, D.C., knocked on the door of GEICO's headquarters until a janitor admitted him, and met Lorimer Davidson, GEICO's vice president.

The two discussed the insurance business for hours. Davidson would eventually become Buffett's lifelong friend and a lasting influence, and would later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes.

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. He felt confident enough to use what he learned to teach an "Investment Principles" night class at the University of Nebraska-Omaha.

In 1952, Buffett married Susan Thompson at Dundee Presbyterian Church. The next year, he accepted a job at Benjamin Graham's partnership. Graham profoundly influenced Buffett, who described him as “the second most important man in my life after my father.”

Graham taught Buffett the concept of "value investing", which involves finding undervalued companies and holding onto them for the long term. This approach to investing has served Buffett well over the years.

Buffett is known for his wit, wisdom, folksy charm, and philanthropic efforts. His investment prowess and philanthropic efforts have made him a revered figure, sought after by many for his insights and wisdom.

Having grown his initial $9,800 investment into an asset base worth $114 billion over seven decades, Warren Buffet has caused a stir—questions about how he invests" constantly spring up.

Some say his investment philosophy is heavily influenced by his mentor Benjamin Graham who wrote extensively about value investing. Others say he got his investment strategies from his father, Howard Buffett.

But how did Buffett grow his net worth in such a short time? Let's dive into the American mogul's investment portfolio and discover how he grew his $114 billion net worth through stocks, real estate, and startups.

Stocks – Berkshire Hathaway and more

Warren Buffett, one of the world's most successful investors and the CEO of Berkshire Hathaway, has built his reputation on his investing strategy of buying strong businesses with long-term potential and holding them for the long term. Despite his adherence to a proven investing formula, he remains active in buying and selling stocks through his investment firm.

Berkshire Hathaway is a massive holding company based in Omaha, Nebraska. Founded in the 1800s as a textile milling company, it has since evolved into a conglomerate of diverse businesses operating in various industries. The company remains under the leadership of legendary investor Warren Buffett, who has been at the helm since the mid-1960s.

Under Buffett's leadership, Berkshire Hathaway has grown to become one of the largest companies in the world, with a market capitalization that ranks it among the top tier of companies globally. Despite its size, the company is known for its decentralized structure, with individual businesses operating largely autonomously under the Berkshire Hathaway umbrella.

Among the notable businesses owned by Berkshire Hathaway are GEICO, a major insurance provider, and Fruit of the Loom, a leading manufacturer of clothing and textiles. The company's investment portfolio is also closely watched by investors, with Buffett's picks and strategies closely scrutinized by market watchers.

During the first quarter of 2023, Berkshire Hathaway was a net seller of stocks, selling $13.2 billion while buying only $2.8 billion—the company sold $10.4 billion more in stocks than it purchased. Berkshire Hathaway's next 13F regulatory filing provides more details on the company's Q1 stock buys and sells.

In the final quarter of 2022, Buffett "bought the dip" in line with his contrarian investing strategy by purchasing 333,856 additional Apple shares. Apple is the largest holding in Berkshire's portfolio by market value and the second-largest by number of shares.

In addition to Apple, Berkshire Hathaway added to positions in Louisiana Pacific, a manufacturer of building products and engineered wood components, and Paramount Global, whose Paramount+ is an emerging streaming service rivaling Netflix and the like. The conglomerate first bought Louisiana Pacific stock in Q3 2022 and Paramount Global in Q1 2022.

At the same time, Berkshire Hathaway reduced its stake in Taiwan Semiconductor, the world's largest chipmaker, after holding shares for just one financial quarter. The company was also a big seller of bank stocks in Q4 2022.

Despite these recent moves, Berkshire Hathaway has maintained its position in many of its biggest and longest-held stocks. Holdings such as Bank of America, Coca-Cola, and American Express have been held since Q1 2001, and Buffett continues to view them as strong businesses with long-term potential.

Warren Buffett’s top ten stocks by number of shares at the end of 2022 include Bank of America, Apple, Coca-Cola, Kraft Heinz, Occidental Petroleum, Chevron, American Express, Nu Holdings, HP, and Paramount Global.

In the first quarter of 2023, the S&P 500 gained 7%, a promising sign as it historically predicts a full-year gain of 23.1%. Following the last interest rate hike cycle, the S&P 500 has averaged a 12% gain. But, if recession concerns loom, consider a defensive strategy by reducing stocks and holding more cash.

Real estate

Real estate has been a key component of Warren Buffet’s overall investment strategy. In the early 1990s, he began buying shares of real estate companies and has since amassed a significant portfolio in the industry.

As of 2018, Forbes estimated his real estate portfolio to be worth $12.7 billion. All thanks to his real estate service Berkshire Hathaway HomeServices, which provides home valuations and other market data.

Berkshire Hathaway HomeServices is a real estate brokerage franchise network that operates across the United States. Established in 2013, the network encompasses 45,000 agents and 1,350 offices nationwide, making it one of the country's fastest-growing real estate brokerage networks.

The network caters to a diversity of clients, from first-time homebuyers to high-end residential markets, middle-market communities, and commercial real estate.

While Buffett has a reputation for being a value investor who looks for long-term growth and stability, he also understands the unique challenges of the real estate industry.

In an interview with CNBC, he explained that buying and managing real estate is more of a business than an investment and that he’s better off investing in companies than running a real estate business.

Despite this, Buffett has made notable investments in specific real estate ventures. One of his most famous real estate investments was purchasing a beach house in Laguna Beach, California, in 1971 for $150,000. Today, the property is valued at around $11 million.

He has also invested in commercial real estate, including purchasing a 200,000-square-foot office complex in Manhattan.

Worldwide urbanization has led to a global real estate boom, reaching a massive $7 trillion in 2022. The sector is forecasted to grow $8 trillion from 2023 through 2028 at a CAGR of 1.8%. The need for high-quality housing and infrastructure, as well as the rise of nuclear families and a desire for clean, secure environments, are driving market growth.

Further fueling this growth are technological advancements, such as the integration of artificial intelligence and the Internet of Things. Government initiatives and increasing consumer spending also contribute to the market's upward trajectory.

Startups

Warren Buffett is known for making bold investment decisions that pay off handsomely over the years. Recently, his attention has turned to financial technology startups, particularly those focused on emerging markets.

One such startup is Nubank, a fast-growing fintech based in Brazil that has been making waves in the Latin American market. In a recent funding round, Nubank secured an impressive $750 million, with Warren Buffett's Berkshire Hathaway leading the charge by investing $500 million.

This investment is a major vote of confidence in Nubank and its mission to expand its reach across Latin America. With the new funds, the company's valuation has soared to $30 billion, up from $25 billion in its previous funding round.

This places Nubank on par with other major fintech companies like Robinhood Markets and Lufax, although it still lags behind the Chinese fintech giant Ant Group.

This is not the first time that Warren Buffett has shown an interest in emerging market fintech. In recent months, Berkshire Hathaway has invested around $600 million in two other major financial technology companies: Brazilian payment processor StoneCo Ltd. and the parent company of India's largest mobile payments service, Paytm.

Both of these investments were spearheaded by Todd Combs, one of Berkshire's two portfolio managers. In the case of StoneCo, Warren Buffett acquired 10.7 million shares worth $143 million, making it the 39th largest holding in the Berkshire portfolio.

The investor now owns 4.24% of the outstanding StoneCo stock, having started building up the position in Q4 2018. Since then, they have sold 3.47 million shares, resulting in a loss of 42%.

Meanwhile, his investment in Paytm marks Warren Buffett's first foray into the Indian market. Berkshire Hathaway has taken a stake in One97 Communications Ltd., which owns Paytm, and Todd Combs will be joining the company's board.

Though the size of his investment in Paytm has not been disclosed, it’s estimated to be $360 million, thus valuing the company at around $10 billion. This is a significant endorsement of Paytm's potential in the fast-growing Indian market and positions Berkshire Hathaway as a major global player in the fintech space.

Early-stage venture performance in 2022 slowed and eventually declined after a good 2021. Deal volume and positive activity dropped to a historically low level in Q3 2022 and rebounded slightly in Q4, but remained historically depressed.

The startup funding outlook is becoming less favorable, particularly for female founders, with lower shares of deals and capital deployed. Although valuations point to a more buyer-friendly market in 2023, early-stage ventures have an uncertain outlook, so it’s wise to proceed cautiously when investing in this space.

Cars 

Warren Buffett is a frugal person who avoids spending his wealth on materialistic things, including cars. He maintains a one-car garage and will only be seen driving for small work meetings or to pick up his family from the airport.

He only puts about 3,500 miles on his car annually and prefers to drive American-made vehicles rather than flashy luxury cars. Even though he owns more than 60 companies, his car collection is not diverse.

Buffett's car collection includes a 2014 Cadillac XTS, the 2006 Cadillac DTS, and the 2001 Lincoln Town Car. His current car is a 2014 Cadillac XTS, a five-door sedan with an 8-inch touchscreen infotainment system and standard Magnetic Ride Control. The car is powered by a 305 horsepower V6 engine and costs around $45,000.

Buffett drove a 2006 Cadillac DTS for nearly eight years before upgrading to his 2014 Cadillac XTS. He got the DTS after auctioning off his 2001 Lincoln Town car to raise money for Girls Inc. With a 275 horsepower 3.6-liter engine, the DTS's price tag was around $42,560.

Buffett's 2001 Lincoln Town Car was his daily driver until 2006. The car came in three trims: Executive, Signature, and Cartier. He owned the Signature version of the car, which cost around $41,000 and came with luxurious features like memory foam seating, a wood-trim steering wheel, and leather grab handles.

Buffett invests in the automobile industry through Berkshire Hathaway, which owns roughly 53 million shares in General Motors (GM), the parent company of Cadillac.

Another investment of Berkshire Hathaway was in BYD (Build Your Dreams), a Chinese EV manufacturer—but it currently owns only 15.99% of the company. Despite this, Buffett has espoused his preference for investing in American carmakers over foreign automobile manufacturers.

The automotive industry experienced a slowdown in 2022 due to supply chain constraints, higher car prices, and macroeconomic headwinds. However, the market anticipates a rebound in 2023, with an expected 5.1% global vehicle sales growth.

The consumer Electric Vehicle (EV) market has proven resilient, with electric vehicle sales growing by 27.9% worldwide in 2022 and expected to continue at a growth rate of 25.2% Year over Year in 2023. However, assessing the risks and opportunities is crucial before investing in the automotive industry.

Planes and aviation

Warren Buffett's private jet collection has evolved over time. In 1986, he bought his first private jet, a used Bombardier Challenger, for $850,000. This purchase wasn't without controversy since Buffett had criticized other CEOs who owned private jets in the past.

However, he justified the purchase, saying that it made his life easier given how much he needed to travel as CEO of Berkshire Hathaway. Buffett upgraded to a brand new model in 1989 for $6.7 million. He named the first jet "The Indefensible" and later renamed it "The Indispensable" after realizing the value of it as a business tool.

In 1998, Berkshire Hathaway acquired Executive Jets Asia (EJA) and NetJets for $725 million, which gave Buffett ownership of the world's largest private jet fleet.

While Buffett has received criticism for his private jet purchases, he sees them as essential tools for his business endeavors. His investments in various aviation companies show his belief in the industry's long-term growth potential.

The aviation industry has been through a challenging period due to pandemic-related restrictions and the war in Ukraine leading to over $10 billion of leased aircraft being lost to Russia. However, the industry is slowly recovering, with projected worldwide passenger numbers expected to reach four billion in 2023.

This is particularly evident in emerging markets, such as Asia and the Middle East, where investments are being made to meet increased demand for air travel.

Gold and silver

Warren Buffett is a man of principle, and staying true to his value investing philosophy, he has never been a fan of gold. However, don't accuse him of disliking all precious metals. Buffett has put nearly $1 billion into silver, which holds a different place in his heart.

But why the bias against gold? One might assume that a shrewd investor like Buffett would jump at the chance to add a glittering asset to his portfolio.

It all comes down to his commitment to value investing—an approach that emphasizes investing in companies based on their intrinsic value. On the other hand, gold as an asset class has no intrinsic value beyond its rarity and physical properties.

It's no wonder that Buffett sees silver in a different light. Unlike gold, it actually has industrial uses and can be found in many everyday objects, from batteries to electronics. For Buffett, this makes silver an asset class that better aligns with his core principles.

However, there have been instances where Buffet’s Berkshire Hathaway made surprising moves with gold stocks. In the second quarter of 2020, the conglomerate invested approximately $563.6 million in Barrick Gold, one of the world's largest gold miners.

This unexpected interest in the gold industry caught the investment world off guard, as Buffett had previously shown a clear disdain for gold.

Ultimately, Berkshire Hathaway's position in Barrick Gold was short-lived, as the conglomerate exited the investment after only two quarters. Buffett probably recognized the temporary opportunity presented by gold's price surge during the pandemic, considering its status as a safe-haven asset in times of economic uncertainty.

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