Today, American billionaires still dominate the list of the world’s richest people, with vast fortunes drawn from many different sources and business activities. Among them, one billionaire is always mentioned for his unwavering ‘simplicity and humility.’
The Clean Billionaire
According to Forbes magazine, Warren Buffett is the world's 2nd-richest billionaire, with a fortune exceeding 44 billion USD, and his wealth will reach 100 billion USD in the next 10 years. However, he is entirely different from famous billionaires of the 80s such as Ivan Boesky and Micheal Milken. He is known as someone who became wealthy “cleanly.”
He works without a computer, yet was consistently one of America's wealthiest people in the 90s and was greatly admired by information technology king Bill Gates.
That is Warren Edward Buffett. Born in 1930, he studied finance at the Wharton School of Finance in 1947–49, then unexpectedly transferred to the University of Nebraska, graduating in the subject there in 1950. Still dissatisfied with his education, he continued at Columbia University and earned a master's in economics in 1951.
He then worked and exercised his two outstanding abilities simultaneously: sales and securities analysis. By 1965, he had saved enough to buy a large stake in textile company Berkshire Hathaway, and in 1970 became its Chairman and CEO.
And with his talent, this gifted owner transformed that textile workshop into a giant corporation in the 1990s, operating in some of the most lucrative yet difficult fields: buying and selling companies, insurance, manufacturing, services, and more.
Although he lives simply and does not stand out from his neighbors, this billionaire is generous toward charity. He is currently actively involved in worldwide anti-AIDS work alongside famous singer Bono, who sang at his wife's funeral last year.
Like Bill Gates, he revealed that he would devote 99% of his wealth to the charity bearing his name, the Buffett Foundation, and other charitable organizations. The billionaire has not decided which of his 3 children will inherit his assets. He said he has written a will, but it only addresses how management authority at Berkshire Hathaway will be divided and may be opened only after his death.
The Quiet American Who Captured the World’s Attention
Warren Buffett is a rather quiet American, yet his every word and action attracts global attention. One of America's richest men, he lives modestly in a home far from Wall Street, the largest financial and securities center in the United States and the world. He lives in Omaha, a small town of 300,000 people in Nebraska
His office looks like a doctor's clinic, with just 11 employees helping him run his entire empire. He works in an old-fashioned way, without computers or computing machines. Warren Buffett's humility has made him an American hero, a clean, simple, honest figure in finance.
Journalist Adam Snith, author of Supermoney, wrote of him: “No machines tracking company share prices on the stock market, no tranquilizers, no manicured nails, no noisy triumphs. Just simple, understandable values. He spends much of his time playing ball with his children or looking at rice fields.”
Though very modest, billionaire Warren Buffett sometimes makes a splash and occasionally thinks rather unconventionally. On his birthday in 1983, he suddenly decided to buy Rose Blumkin’s entire Nebraska Furniture store. He visited her to ask the price, left, and soon returned with a check for USD 60 million. Buying an entire store without consulting a single economist was something only Warren would dare imagine and have the means to do.
A Person with a Special Affinity for… USD!
Many people believe Warren Buffett works miracles with US dollars. Donald Keough, chairman of Coca-Cola and a close friend since the 50s, recalled: “I had 5 children and had to take the whole family to work every morning. Warren had 3 children and stayed home playing with electric trains. One day, Warren told me that if I gave him 5,000 USD, I would no longer have to worry about having enough money to send my children to college. At the time, I did not know what Warren did, so how could I dare give him 5000 USD? If I had, I would now have enough money to buy an entire university.”
Warren Buffet was born into a well-off family. His father served four terms as a Republican congressman and owned a foreign currency trading company. At just 11, young Buffet began trying his hand at stock trading. He bought 3 shares of a company called Cities Service Preferred for USD 40 each. The price immediately plunged, but he held on rather than selling in panic to salvage his investment. Not long afterward, he sold his shares for as much as USD 200 each.
Remarkable, yet he only truly entered business in 1956, using USD 5,000 of his own and USD 100,000 borrowed from friends to establish a company. When it dissolved in 1969, its capital had grown more than 35 times from the initial amount.
In 1963, he bought 5% of American Express’s total shares when each share cost just USD 35. Five years later, the company’s share price had risen to USD 189. During the 70s, he invested heavily in mass-media companies and became a major shareholder in Time magazine, leading American advertising company Ogilvy & Mathew, and Interpublic.
The list of Warren Buffet's financial successes is certainly long, and they have become legendary. Beshire Hathaway, which he currently owns with a 44% stake, is worth more than 10 billion USD.
Even the home purchase of the head of renowned financial group Berkshire Hathaway proved profitable, although he did not intend to make money in this field. He bought his Omaha home nearly 50 years ago for USD 31,500. In 2003, local property appraisers valued Buffett's entire home at USD 700,000!
The Oracle of Omaha
Although a close friend of Bill Gates, he firmly refused to invest in information technology projects, which were fashionable throughout the 80s and 90s of the last century. The internet bubble's burst in early 2000 showed this shrewd old man's number 1 foresight and clear-headedness. He did not suffer bankruptcy or severe shocks like other trend-following investors.
He has a special talent for identifying companies with growth potential that are currently undervalued or severely undervalued. That is precisely where he outperforms millions of other investors. By buying companies and assets at very low prices and selling them at sky-high prices a few years later, he earns almost unimaginable returns.
Specifically, over nearly 40 years of diligent investing, his company Berkshire Hathaway has achieved an average annual return of 22.6%. Overall, from 1965 to the present, Berkshire Hathaway's returns have increased more than 2,000-fold, with ownership of over 40 subsidiaries and around 150,000 employees. This does not include his large shareholdings in Coca-Cola, American Express, Walt Disney, or Gillette, or smaller companies such as Geico or General Re.
The terrorist attacks of 11/9/2001 nearly plunged the insurance industry into crisis. His large investments also suffered substantial losses of up to USD 3.8 billion. To this day, that remains this financier's only significant loss.
Because of such foresight, Buffett is called the “Oracle of Omaha.” Although some debate and counterexamples exist, most Americans and international businesspeople who have worked with him regard him as the greatest investor of all time.
Important Milestones in Life
1945: Warren earned USD 175/month delivering newspapers for the Washington Post. Having saved some money, he spent USD 1,200 to buy 0.2 km2 of farmland.
1947: He pooled money with a classmate to buy a USD 25 pinball machine and placed it in barbershops for customers to play while waiting their turn. He bought 2 more at similar prices before selling all 3 to a veteran for USD 1,200 a year later.
1949: He unexpectedly transferred from Wharton to the University of Nebraska. Immediately after graduation, he was offered a job at J.C. Penney, one of the leading retail corporations in the US supermarket system, but declined.
1950: He applied to Harvard Business School but was rejected, so he went to Columbia University instead, where two famous securities professors, Ben Graham and David Dodd, mentored him until he earned his Master's in Finance.
1951: Discovering that his teacher Graham was on the leadership board of insurance company GEICO, he offered to work for free. The company declined, fearing it could not meet Warren's great ambitions.
1954: Ben Graham invited Warren to work for him at a starting salary of USD 1,000/month.
1956: Warren increased his savings to USD 140,000 and established Buffett Associates, Ltd.
1959: Warren met Charlie Munger, and the two immediately hit it off. Munger later became Vice Chairman of Berkshire Hathaway and contributed greatly to its success.
1962: Already possessing capital in the millions, he invested USD 1 million in a manufacturing plant he considered promising, called Berkshire Hathaway, at the low price of USD 8 per share.
1970: His personal wealth reached USD 25 million at just 39. Warren held 29% of Berkshire Hathaway's shares and became its Chairman.
2005: The world's 2nd-richest billionaire, with assets exceeding USD 44 billion.
According to Vietnamnet
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