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The Oracle of Omaha - Billionaire Warren Buffett's Success Story

American entrepreneur and world's largest investor Warren Buffett returned to the second line in the list of the richest people in the world according to Forbes for 2016. His fortune is estimated at $ 75.6 billion and is second only to the capital of Microsoft founder Bill Gates.

Buffett, 86, earns most of his income from Berkshire Hathaway, where he is chairman and CEO. According to the financial magnate, he always knew that he would be rich. What helped Warren Buffett achieve such impressive success?

The first steps of the future billionaire

Warren Buffett was born in 1930 in Omaha, Nebraska, where he currently lives. In the family, he was the middle of three children and the only son. The love of numbers was passed on to Warren from his father, entrepreneur and politician Howard Buffett. The boy idolized his father. Howard Buffett, who was left without a job during the Great Depression, managed to create his own investment company with modest savings from working as a stockbroker.

Warren was a bright child and studied at school as an external student. As a teenager, he began to earn money by delivering newspapers on a bicycle and selling Coca-Cola and chewing gum. Buffett began reading books about investing as a child, he found them in his father's office.

At the age of 11, he bought his first shares with the money he shared with his sister. When their price dropped, Warren was very worried. As soon as the shares went up in price, he quickly sold them, making a profit of $5. However, if he had waited a few more days, he could have earned almost a hundred times more. This situation taught Buffett that the main virtues of a good investor are patience and composure.

When Warren was 12 years old, the family moved to Washington, which the boy was very unhappy with - he loved his hometown and school friends. He lost interest in studies and once even tried to run away from home. Parents did not scold him, his father only said that he was capable of more. The father's endless faith in his son was the force that helped Warren succeed. Buffett is convinced that the best gift in his life was his father.

At the age of 13, Warren managed to accumulate savings, with which he purchased a plot of land. The young entrepreneur began to rent it out to farmers, thus obtaining a source of passive income.

Buffett did not intend to go to college. At the age of 16, he left school and became quite successful in buying shares. The father urged his son to continue his studies. Warren, not wanting to upset him, went to college. But Buffett did not want to waste time, so he completed his studies as an external student, showing excellent results.

The student who surpassed the teacher

After the University of Nebraska, Buffett applied to Harvard Business School. However, at the interview, he was advised not to even dream of entering Harvard because of his too young age.

Buffett later realized that it was for the best. Flipping through the catalog of Columbia University, he recognized the names of the teachers - Benjamin Graham and David Dodd.

He read their textbook "Securities Analysis" as a child. Warren wrote a letter: “Dear Professor Dodd! I thought you were gone. But now, having learned that you are alive and teaching, I really want to go to Columbia University.” David Dodd appreciated the bold act and accepted Buffett on the course.

Warren was happy to learn from Ben Graham and considered him his main teacher after his father. A talented economist and teacher, he knew how to inspire his students. From Ben Graham, Buffett remembered for the rest of his life

There are two main rules for investing:
Never lose money.
Never forget the first rule.

Ben Graham essentially became the creator of value investing. Graham urged investors to treat shares of companies as their own share of the business. With this approach, it makes no sense to worry about temporary fluctuations in the securities market, you need to focus on the long term.

The economist believed that it was necessary to carefully study financial statements and buy shares of undervalued companies. Over the years, Buffett has continued to adhere to this advice.

At the age of 20, Warren began to play on the stock exchange. He analyzed information from financial directories and looked not just for stocks, but for potentially successful businesses that were underestimated by the business community. At 31, Buffett has already made his first million., becoming the most successful student of Benjamin Graham.

Charismatic speaker
One of the most important for Buffett considers learning to speak with Dale Carnegie. The financial magnate admitted that in his youth he was very afraid of public speaking. To overcome his fear, he enrolled in a Carnegie course. The billionaire is sure that if not for these classes, his whole life would have turned out differently. Therefore, there are no university diplomas in Buffett's office, but a certificate of completion from the Dale Carnegie course hangs in a place of honor.

The formation of a financial empire

Returning to his native Omaha in 1956, Buffett formed his first investment partnership, Buffett Associates. Shareholders consistently received good dividends thanks to his forward-thinking decisions.

The investor began to come to the conclusion that one should not limit oneself to the shares of undervalued companies, and that one should not buy the shares themselves, but the well-managed long-term business that stands behind them.

In 1962, Buffett became interested in the textile company Berkshire Hathaway, which was close to bankruptcy. He dissolved his fund and started buying Berkshire shares. In 1965, he already had a controlling stake. Buffett led the enterprise, re-profiling it into an investment company. Having invested Berkshire's income in the insurance business, which was preferential for that period, the financier discovered a gold mine. By the age of forty, his fortune was already estimated at about 30 million dollars.

Buffett continued to acquire large stakes in companies whose reputation he trusted. At 46, he became the owner of National Indemnity Co, and a little later - GEICO. In 1973, he invested $11 million in shares of The Washington Post, which are now worth about $1 billion. Coca-Cola securities, acquired by an investor for $1 billion, rose to $13 billion. Gillette shares rose in price from $600 million to $4.6 billion. For his amazing flair in the investment business, Warren was nicknamed "the visionary" and "the oracle of Omaha."

The main feature of Buffett's approach is avoiding short-term speculation and long-term investment.

Warren Buffett's personal life

As is often the case with geniuses, Buffett experienced difficulties in communicating in his youth, especially with girls. After graduating from university, he already had professional skills in the financial sector, but in the romantic one he felt like a teenager.

Buffett claims there were two defining moments in his life: his birth and meeting his future wife, Susan Thompson. Warren was crazy about her, he immediately realized that this was his half. Susie realized this a little later. They got married when Buffett was 21, his fiancee was 19. His relatives noted that the kind and caring Susan balanced Warren, made him softer.

Warren Buffett and Susie Thompson

She supported him in all endeavors, devoted herself to her husband and three children, simultaneously doing charity work and fighting for civil rights. In many ways, she influenced the change in her husband's political views. He grew up in a family of Republicans, and became a Democrat. In 2016, he actively supported presidential candidate Hillary Clinton and even sponsored her election campaign.

Buffett was reproached for not giving enough money to charity. Susan also wanted to give more, but did not interfere in her husband's business. And he believed that his wife would outlive him and then transfer the accumulated money to some kind of charitable foundation so that the amount was more tangible.

When the children grew up and began to live their own lives, Susan felt that she no longer wanted to be just a housewife. She left for San Francisco, leaving her husband in the care of her friend Astrid Menks. There was no official divorce. Moreover, the couple maintained an excellent relationship until Susan's death from cancer in 2004. Two years later, Buffett formalized a relationship with Astrid. At that time he was 76 years old.

In 2012, he himself survived prostate cancer, but managed to cope with it. At the moment he is still married to Astrid.

Hobbies of billionaires
Buffett's hobbies include playing the ukulele and playing bridge with his good friend Bill Gates.

Genius, billionaire, philanthropist

To date, the core of Buffett's financial empire, Berkshire Hathaway, is ranked 4th in the Fortune Global 500 ranking - the top of the world's largest companies. The billionaire was the only one who created a company from scratch that hit the top ten Fortune.

Berkshire is a holding company that owns about 70-80 businesses that operate independently of each other and of Buffett himself. The only requirement he makes of them is not to damage Berkshire's reputation.

The investment portfolio of Warren Buffett is constantly replenished with shares of international corporations and is currently valued at about $660 billion. At the same time, the financial magnate adheres to the rule to invest only in what he likes:

Interestingly, the best investor in the world ignored the high-tech sector for a long time, and only in 2011 did he invest in an IT company for the first time, and in 2016 he acquired shares of the American corporation Apple for a total of about $1.5 billion.

In 2010, Buffett made history by donating more than half of his fortune to the Bill & Melinda Gates Foundation and several other foundations.

Three of the charities on this list are led by Buffett's children, who wished to continue the mother's work.

The donation, about $37 billion, was the largest single charitable donation in human history.

In addition, Buffett appealed to the world's top businessmen with a call to sign the "Giving Pledge" - a commitment to give about 50% of their income to charity. In 2016, 154 people signed the oath. In his will, Buffett specified that 99% of his fortune would be distributed to various charitable foundations.

Breakfast of an aristocrat
Another original form of charitable giving is the annual Warren Buffett breakfast, which is auctioned off and then donated to charity. For the opportunity to have breakfast with a billionaire, you have to fork out. In different years, the lot went for an amount from $600,000 to $2.63 million, and in 2012 - for a record $3.5 million.

humble rich man

Despite his billions, Buffett doesn't seem to be obsessed with money at all. He leads a rather modest lifestyle and is very conservative. Having the opportunity to choose to live anywhere in the world, he continues to live in his hometown of Omaha in a house that he bought back in 1957.

For 55 years now, he has been commuting to work on the same road. At 86, Buffett drives a Honda by himself. Every morning he stops at his favorite McDonald's and, when things are not going well on the stock exchange, he even saves on breakfast. The only weakness of the billionaire are jet planes.

Despite the fact that the head of Berkshire Hathaway works with money, he does not have a computer or even a calculator - his mind is so clear that they simply are not needed. Buffett teaches students, publishes books on investing. Warren Buffett's quotes about finance have become winged and scattered all over the planet. The entire business community is still listening to his words, calling them financial prophecies.

The Oracle of Omaha, during his long career as a successful businessman, has repeatedly advised on the conduct of business, including investing and the stock exchange. His statements were immediately disassembled into aphorisms. The press loves to quote the words of the most successful investor in the world. Every quote has a deep meaning. The rules, thanks to which he became one of the richest people on the planet.

You cannot depend on one source of income. Invest to earn extra income.
If you buy what you don't need, you will soon have to sell what you need.
Constantly looking for excuses to stay at a job you hate instead of finding a new one is like putting off sex until retirement.
The most successful is the one who does what he loves.
You need to be ready for a happy chance. When gold pours from the sky, it is better to have a bucket, not a thimble.
Remember an important thing - this day is not subject to exchange and return.
Constant training becomes the key not to ideal results, but to stable ones.
You should not appear on the stock exchange until you are able to calmly watch your stock fall by 50%.
It is not necessary to make only brilliant decisions, it is enough not to make terrible ones.
Even talented people just need time to get good results. You won't get a baby in a month even if you get 9 women pregnant.
Do business with people you like and share your values.

It takes twenty years to build a reputation. And five minutes is enough to destroy it forever.