How Warren Buffett’s Wealth Grew Since The 1930s by FindTheCompany
In 2016, it’s easier than ever to play the financial markets. From the explosion of online brokers to the rise of robo-advisors, armchair investors have dozens of tools just a few clicks or taps away. Daily trading is a snap. Deep financial research has never been more widely available. If anything, you’d be a fool not to jump in, right?
Warren Buffett might disagree.
Today, the Oracle of Omaha is worth upwards of $60 billion. He’s beaten the stock market roughly 47 of the last 50 years. Along the way, he’s made his fortune not through a whirlwind of clever trades, but instead, through a series of smart, long-term investing decisions.
Warren Buffett has controversially avoided tech stocks and fancy new investing technology, preferring to evaluate companies by simple, time-tested standards. Is the market undervaluing a company’s intrinsic value? Does the company have a smart, responsible management team? Is the organization based on a fad, or is it a strong leader in a durable industry?
To get a better sense of Buffett’s success and investing mindset, the FindTheCompany team went back to his childhood, tracking his net worth from birth to the present day.
For this timeline, note that Warren Buffett’s pre-1994 net worth is based on estimates, rough calculations and one-off reporting. Some famous Buffett stories and anecdotes are cited in several places across the web, but not necessarily based on one solid, primary source. With this in mind, we’ll do our best to caveat each figure, and present a range where necessary.
Starting in 1994, FindTheCompany turned to Buffett’s publicly available form DEF-14As. These documents provide information on Buffett’s Class A and Class B shares in his company, Berkshire Hathaway, as well as the current market value of the stock. Given Buffett’s own admission that more than 98 percent of his net worth is tied up in the company, we can estimate his net worth over the last 22 years with fairly strong confidence.
For each year or range of years on this list, we’ll highlight key moments in Warren Buffett’s life, from his teenage pinball machine business to his lucrative acquisition of GEICO. But we’ll start even earlier, when Buffett turned a few sticks of gum into a tidy profit.
Warren Buffett’s Wealth – The 1930s
Estimated net worth: $100
2016 dollars: $1,700
As early as six years old, Buffett was already an entrepreneur. He bought Coca-Cola six packs for 25 cents at his grandfather’s store, then sold each bottle for 5 cents — a 20 percent profit per pack. He employed a similar model for Juicy Fruit gum, netting 2 cents of profit per pack. Rumor has it he wouldn’t sell individual sticks, for fear he wouldn’t be able to sell the remaining four pieces individually.
The Early 1940s
Estimated net worth: $5,000 – $6,000
2016 dollars: $65,000 – $70,000
Age: early teens
Buffett bought his first stock in 1941, six shares of Cities Service (later, CITGO, an oil company) at $38 each. A short time after, he sold the stock at $40. The price would skyrocket to more than $200 over the next two years. It was a missed opportunity for Warren Buffett, but a lesson in patient investing that shaped the rest of his career.
Buffett went on to make $175 per month delivering the Washington Post as a paperboy. He claimed a $35 tax deduction for his bicycle.
In 1944, he invested $1,200 of his savings into 40 acres of farmland. By the next year, his net worth was likely as high as $6,000.
The Late 1940s
Estimated net worth: $9,800
2016 dollars: $98,000
Age: late teens
In 1947, Buffett and a friend spent $25 on a used pinball machine, setting it up in a local barbershop. They went on to buy two more, and after growing the business for several months, the two boys sold the whole operation for $1,200. In 2016 dollars, that would have amounted to more than $10,000 in profit in under a year — not bad for a couple of teenagers.
Between his paper job, land investment, the pinball business and other savings, Buffett had saved about $9,800 by the age of 19.
The Early 1950s
Estimated net worth: $20,000 – $50,000
2016 dollars: $100,000 – $500,000
Age: early 20s
The early 1950s represented a transitional period for Warren Buffett. He received his M.S. in economics from Columbia Business School, married Susan Thompson and accepted a job from one of his college professors, Benjamin Graham. His starting salary was $12,000 per year (about $106,000 in 2016 dollars).
That said, our net worth estimates for this period are fairly wide. Buffett was establishing the foundation for his portfolio, but he had yet to make most of his key investments.
The Late 1950s
Estimated net worth: $140,000 – $174,000
2016 dollars: $1.2 million – $1.5 million
Age: late 20s
Buffett started Buffett Partnership Ltd, an investment partnership based in Omaha. He went on to found two additional partnerships over the next several years.
In 1958, he bought a five-bedroom house, where he still lives to this day. The house was $31,500 ($267,000 in 2016 dollars). By 1958, he had doubled his original partnership’s money, and his net worth was well into the six figures.
The Early 1960s
Estimated net worth: $1 million – $1.5 million
2016 dollars: $7.9 million – $12 million
Age: early 30s
Legend has it Buffett set a goal to become a millionaire by age 30 (1960), and many reports estimate he was successful. But a safer date estimate would be 1962, when Buffett’s partnerships hit around $7.2 million in value. Given Buffett’s percentage of the business, he was worth at least $1,025,000 by that year.
Buffett merged his partnerships into one firm, then purchased Berkshire Hathaway, a failing textile manufacturing firm. He would grow his fortune almost entirely through Berkshire Hathaway up to the present day.
The Late 1960s
Estimated net worth: $10 million – $25 million
2016 dollars: $75 million – $162 million
Age: late 30s
In 1965, Berkshire Hathaway bought a 5 percent stake in the Walt Disney Corporation for the modest price of $4 million. It would prove to be one of Buffett’s smartest investments (although he admits he made a mistake to sell the shares in the ’90s).
We estimate Buffett’s net worth was around $10 million at this point, and probably close to $25 million by 1969.
Warren Buffett’s Wealth – The 1970s
Estimated net worth: $100 million
2016 dollars: $328 million
Living solely on a $50,000 per year salary, Warren Buffett saved the rest of his assets, which likely passed the $100 million mark around 1979. During this time, Berkshire Hathaway would acquire See’s Candies (1972), and invest in all sorts of