How Warren Buffett Became One of the Wealthiest People in America

A Chronological History of the Oracle of Omaha: 1930-2020

On August 30, Warren Edward Buffett is born to his parents, Howard and Leila Buffett, in Nebraska
At 11 years old, Warren buys his first stock. He purchases six shares of Cities Service preferred stock—three shares for himself, three for his sister, Doris—at a cost of $38 per share. The company falls to $27, but shortly climbs back to $40. Warren and Doris sell their stock. Almost immediately, it shoots up to more than $200 per share
In his senior year of high school, Warren and a friend purchase a used pinball machine at a cost of $25. Buffett begins to think about the potential profit and places it in a nearby barbershop. Within months, he owns three machines in three different locations. The business is sold later in the year for $1,200 to a war veteran. In the same year, Warren has earned over $5,000 delivering newspapers. His father presses him to attend college, a suggestion Warren does not take well. Nevertheless, that year, he enrolls as a freshman at the Wharton School of Finance and Commerce in Pennsylvania. Buffett hates it, complaining he knows more than the teachers.
Buffett applies for admission to Harvard Business School and is turned down. He eventually enrolls at Columbia after learning that Ben Graham and David Dodd, two well-known security analysts, are professors.
Graham retires and folds up his partnership. Since leaving college six years earlier, Warren's personal savings has grown from $9,800 to over $140,000. The same year, the Buffett family returns home to Omaha. On May 1, Warren creates Buffett Associates, Ltd. Seven family members and friends contribute a total of $105,000, while Buffett invests only $100.5 He's now running his own partnership and will never again work for anyone else. Over the course of the year, he opens two additional partnerships, eventually bringing the number under his management to three. Years later, they will all be consolidated into one.
Buffett begins to purchase shares in Walt Disney Co. after meeting with Walt personally. Warren invests $4 million, which is approximately 5% of the company. The American Express shares, which were purchased shortly before, are selling for more than double the price Warren paid for them. Buffett arranges a business coup, taking control of Berkshire Hathaway at the board meeting, and naming new president Ken Chace to run the company.
The Buffett Partnership is now completely dissolved and divested of its assets. Warren now owns 29% of the stock outstanding in Berkshire Hathaway. He names himself chairman and begins writing the annual letter to shareholders.15 Berkshire makes $45,000 from textile operations, and $4.7 million in insurance, banking, and investments. Warren's side investments are making more than the actual company itself.
Berkshire trades at $290 per share. Warren's personal fortune is approximately $140 million, but he was living solely on a salary of $50,000 per year. Berkshire begins to acquire stock in ABC.
Buffett finally shuts down the Berkshire textile mills after years of sustaining it. He refuses to allow it to drain capital from shareholders.18 Warren helps orchestrate the merger between ABC and Cap Cities. He is forced to leave the board of the Washington Post. The federal legislation prohibits him from sitting on the boards of both Capital Cities and Kay Graham's Washington Post. Buffett purchases Scott & Fetzer for Berkshire's collection of businesses. It costs around $315 million and boasts such products as Kirby vacuums and the World Book Encyclopedia.
After Berkshire Hathaway's significant investment in Coca-Cola, Buffett serves as director of the company from 1989 to 2006. He is also director of Citigroup Global Markets Holdings, Graham Holdings Company, and The Gillette Company. Buffett marries his longtime romantic companion Astrid Menks, at age 76. Buffett announces he will give away his entire fortune to charitable causes, committing 85% of his wealth to the Bill and Melinda Gates Foundation.
Buffett, along with private equity group 3G Capital, purchase H. J. Heinz for $28 billion. Over the next two years, Buffett also acquires Duracell and Kraft Foods Group.
Buffett begins selling off some of his estimated 81 million shares of IBM stock, mentioning that he no longer assigned as high a value to the company as he did six years previously.21  His net remaining shares sit at about 37 million. He increased his investment in Apple, and it became Berkshire Hathaway's largest investment in one company's common stock. After exercising some warrants, Buffett also became Bank of America's largest shareholder, owning about 700 million shares.
Buffett begins selling off some of his estimated 81 million shares of IBM stock, mentioning that he no longer assigned as high a value to the company as he did six years previously.21  His net remaining shares sit at about 37 million. He increased his investment in Apple, and it became Berkshire Hathaway's largest investment in one company's common stock. After exercising some warrants, Buffett also became Bank of America's largest shareholder, owning about 700 million shares.
Buffett's annual letter to Berkshire Hathaway shareholders is released on Feb. 23. He mentions that Berkshire's success has been a product of what he calls "The American Tailwind."22 In an interview with CNBC on Feb. 25, Buffett admits to having overpaid for Kraft Heintz and is not planning to either buy or sell shares in the company.
In his Feb. 22 Berkshire Hathaway shareholder letter, Buffett addresses the topic of succession and says the culture will live on beyond himself and Munger. He says the book "Margin of Trust" by Larry Cunningham and Stephanie Cuba will be released at the annual meeting in Omaha on May 2.24 In addition, Berkshire Hathaway executives Ajit Jain and Greg Abel will receive more visibility and field questions at the meeting. That same letter outlines how Buffett intends for his shares to be handled after his death. Each year, a certain number of A shares will be converted to B shares, then distributed to various foundations to use promptly