Invest Wisely

Warren Buffet Net Worth – His Status in 2018

by Ryan Kinnar5 min read
Where did Warren Buffet Net worth come from?
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Warren Buffet’s name is synonymous with success in the financial world today. Known as Oracle of Omaha, Buffet is considered one of the greatest investors of all time. He got this nickname because of his ability to pick the right investments and also gauge the movement of the markets correctly. His investment strategy is simple yet powerful – take the long-term position and accomplish this by buying companies that are fundamentally sound but are trading below their intrinsic value. Thanks to this philosophy, Warren Buffet net worth in 2018 is $85.8 billion, making him the third richest man alive in the world today.

 

Warren Buffet Net worth vs. Uruguay
Warren Buffet Net worth is more than the GCP of Uruguay.

 

Early Life

Born on August 30, 1930, being the son of a US Congressman did stop him from hard work. In fact, before his father became a politician, he was a stockbroker. And this definitely shaped Warren Buffet’s life choices. He demonstrated a knack for making money early in his life. He started out by delivering newspapers as well as selling candy and magazines door-to-door. When he was 10 years old, he visited the New York Stock Exchange and that led him to buy his first stocks when he was 11. He bought 3 preferred shares of Cities Service at $38 per share and sold them at $40. However, those shares rose to $200 per share. And this was his first lesson – Warren Buffet believes that this incident taught him the value of patience. By the time he was 13, he was running his own newspaper business and filing his own tax returns.

 

He graduated from Columbia University with a degree in Economics, which is where his idol, Benjamin Graham was teaching. Benjamin Graham is the author of The Intelligent Investor, one of the greatest books ever written about value investing. In 2018, it is still a best seller. By the time he graduated from college, thanks to his saving and business ventures, Warren Buffet’s net worth was $9,800 (about $101,000 today).

 

 

Growth and Career

Buffet officially started his career in 1951 as an investment salesman at Buffet-Falk & Co. He worked there for three years before moving to Graham-Newman Corp. in 1954 as a securities analyst and stockbroker. Finally, in 1956, he started his own company in partnership with his childhood friend Charlie Munger and called it Buffet Partnership Ltd. He was a general partner for a period of 13 years, but his partnership with Munger has been a life-long partnership. Munger is the Vice Chairman of Berkshire Hathaway and a corporate giant in his own right, with a net worth of $1.69 billion.  

 

Buffet began buying shares of a struggling textile company called Berkshire Hathaway from 1962 onwards. He finally bought over the company in 1970 and became the CEO and Chairman of this beleaguered enterprise and began using it as a holding company. By 1976, the shares of Berkshire Hathaway rose by 129%, the highest gain the company ever had. In 1979, Berkshire started the year trading at $775 per share. By the end of that year, the company’s shares were at $1,310. Warren Buffet net worth reached $620 million. In May 1990, the company began selling Class A shares. Investors went berserk buying these shares and the markets closed at $7,175 per share. Warren Buffet became a paper billionaire for the first time.

 

Warren Buffet net worth reached $620 million
Warren Buffet net worth reached $620 million by 1979

 

Warren Buffet’s Investment Philosophy Explained

Warrant Buffet is what is called a value investor. A value investor is someone who selects stocks are trading for less than their intrinsic value; such an investor is looking for stocks that have been undervalued by the market. The basic premise of this strategy is that the market tends to be irrational, reacting to good and bad news rather than the actual value of a company. Which means the company has strong fundamentals and can grow in the future and, most importantly, will make money in the long run. Buffet values a company using two basic benchmarks – return on equity as well as profitability. Basically, the investment guru looks at companies that have a low debt to equity ratio. This means he wants the company’s growth in earnings to be generated from investor’s equity rather than debt. At the end of the day, people have compared Warren Buffet’s investing style to that of a bargain hunter – it is a practical, down to earth attitude, where he is look for the best value for money.  

 

Warren Buffet Net Worth Explained

Warren Buffet is the chairman as well as Chief Executive Officer of the Omaha, Nebraska based investment conglomerate, Berkshire Hathaway. The conglomerate owns more than 60 companies, including Duracell, Geico and Dairy Queen. And a large part of Buffet fortune is attained from the 18% stake he has in his company. Berkshire Hathaway is a hugely successful, publically traded company that has given a 20.8% annual return since 1965 right up to 2016. And according to the company’s latest Form 4 filing in January 2018 with the Securities and Exchange Commission, Warren Buffet owns 282,511 Class A shares as well as 129,657 Class B shares of Berkshire Hathaway.

 

Besides his shares in his own company, Buffet also directly owns shares in multiple other enterprises. He owns more than 2 million shares in Wells Fargo and another 2 million in Seritage Growth Properties. He also owns about 900,000 shares in US Bancorp as well as 9,000 shares in IBM.

 

 

Philanthropy and Charity

Warren Buffet is also considered to be one of the most generous billionaires on the planet. He donates 5% of his Berkshire Hathaway stock every year, mostly to the Bill and Melinda Gates Foundation. In fact, it was he and his friend Bill Gates who launched The Giving Pledge in 2010, which asks billionaires to donate half their fortunes to charitable causes. Since 2006, Buffet has given away more than $27.5 billion worth of his stocks to charity. Overall, the tycoon has given away almost $32 billion of his wealth to charitable causes. And he has promised to give away 99% of his fortune at his death to charity.

 

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