Warren Buffett, who is known to many as the “Oracle of Omaha”, is one of the most successful businessmen in the world. He’s a self-made financial icon with a multi-billion net worth, and his story is one that showcases more than just the power of determination and hard work, but also the power of focus, patience, and taking calculated risks.
Having said that, we believe every success story leaves clues that others can leverage if they’ll but look to discover them. Which is why cover titans of industry, to see if we can reveal some of less obvious success secrets that usually lie hidden in their humble journeys towards success.
So if you’re ready to dive into Warren Buffett’s Success Story to see what kind success insights we can unveil, let’s jump right in:
THE WARREN BUFFETT STORY OF SUCCESS
Entrepreneurship in Childhood
Warren Buffett was born in 1930 in Omaha, Nebraska. He was the son of a US congressman and a stay-at-home mom. While his family had the means to provide a comfortable life for him, young Warren was driven to earn his own keep from a very young age.
Buffett always had a knack and passion for personal finance. One particular book entitled “One Thousand Ways to Make $1000” attracted his attention at the public library at the young age of seven and opened his mind to the possibilities of making money.
He then found as many ways as possible to sell whatever he could in the local neighborhood, from chewing gum to cokes to papers and magazines. When he was in high school, he picked up additional odd jobs such as washing cars and selling off collectibles such as stamps.
His first semi-passive franchising income came when he and a friend bought a pinball machine and placed it in a local barbershop.
This venture went so well that they placed even more machines in other barbershops in the area.
He and a friend later sold the business to a war veteran for $1,200 in addition to its profits.
Young Warren was well aware of the stock market during his first trip to New York City. At only 10 years old, he insisted on visiting the New York Stock Exchange. One year later, he was investing in his first shares of Cities Service, a company that is now called Citgo.
He also purchased three shares for his sister Doris Buffett, showing early in his life that his vision was to create wealth to share with others.
While other kids his age were playing outside, Warren Buffett stayed busy by generating more cash flow through various businesses and investments.
By the time he finished college, he had the equivalent of $112,000 in today’s dollars saved. This was an extraordinary amount of money for a young man in his early twenties.
While he was studying at Columbia Business School, one of his professors, Benjamin Graham, taught him the principles of value investing. These lessons would serve him well throughout his career as an investor.
A Budding Business Career
Buffett began his professional career by working as a securities analyst at Buffett-Falk & Co. in Omaha, Nebraska. At this time, he also married his wife, Susan Thompson, who he would go on to be with until her death in 2004.
In 1956, he started his own company, Buffett Partnership Ltd. This was a very successful venture and he had made enough money to retire if he would so choose.
However, he decided to continue working because he found it enjoyable and stimulating. In 1959, he met Charlie Munger, who would become his business partner for life. Together, they formed Berkshire Hathaway Inc., which is now one of the most successful companies in the world.
Over the next few decades, Warren Buffett continued to grow his businesses and investments, creating tremendous wealth off of a mere $100 of initial investments.
Becoming a Billionaire
In 1962, the various partnerships he had formed generated over $7 million in wealth. About $1 million of this was his personal share, which made him a millionaire at only 32 years old.
His next major move was to invest in and ultimately acquire the textile manufacturer Berkshire Hathaway. This purchase would serve as the foundation for his eventual empire.
Throughout the years, he continued to invest in a variety of companies, including Coca-Cola, Gillette, and American Express. He also helped finance the launch of several businesses, such as the Washington Post and Geico Insurance.
Warren Buffet hit billionaire status in 1985. Although, some say that it was in the 1990s when Hathaway began to trade class A shares, that he finally became a billionaire. Either way, he is still a multi-billionaire and considered one of the most successful investors in history.
While he has gone on record about having regrets about some of his investments in Hathaway, it has not stopped him from continuing to grow his wealth.
Educating a Generation of Investors
Throughout his career, Warren Buffett has been an outspoken advocate of investing in quality companies for the long term. He has taught investment principles since he was a young stockbroker in the 50s after taking a Dale Carnegie public speaking program.
With much greater reach in the media, he has taught these lessons to millions of people over the past several decades through his annual shareholder letters, interviews, and books.
He has also provided one of the longest case studies on index investing through his personal portfolio, which is now worth over $100 billion. He did this by investing in small amounts of various companies and holding onto them for decades to prove that anyone can achieve financial success without needing to know which stocks will go up or down in the short term.
This has inspired a new generation of investors to look beyond traditional methods of stock picking and to focus on building a diversified portfolio of quality companies that can provide them with consistent returns over time.
Staying Humble In Abundance
Buffett is known for his simple lifestyle, despite his billions of dollars in net worth. He still resides in the same house that he bought for $31,500 back in 1958 and for many years lived only on a salary of $50,000 despite his wealth. He is also known to drive his own car rather than using a chauffeur, and he frequently flies economy class when traveling.
He has given away billions of dollars to various charities over the years, including the Bill and Melinda Gates Foundation. He has agreed to donate the majority of his wealth to charity upon his death, and he has set up a giving pledge in which billionaires agree to donate at least half of their fortune to charitable causes.
Applying These Lessons
While it may seem unlikely that anyone will achieve the level of success that Warren Buffett has, we can all learn from his story and apply some of his lessons to our own lives. Many may have thought his story was impossible if they knew that his first investment in a pinball machine only cost him $25.
This story teaches us the power of compound returns. When we put in the effort to save and invest early on, our money has the potential to grow exponentially over time. It also shows us that we don’t need to take unnecessary risks in order to achieve success.
By investing in quality companies and having the patience (and stomach) to hold onto them for the long term, we can build a sizeable portfolio that will provide us with consistent returns.
There are also lessons to learn outside of the world of investing. Warren Buffett is known for using creativity matched with determination to solve problems and generate new ideas.
When we face challenges in our own lives, we can use these same principles to overcome them. So, next time you’re feeling down about your finances or career, remember the story of Warren Buffett and let it inspire you to achieve great things.
With a bit of faith, patience, and a good dose of hard work, everyone can improve their financial situation.