The story of one of the richest man in the world

This gentleman is one of the richest man in the world.

You have to read his story and hear him talk to believe what he has accomplished in his life.

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Watch these videos then read the story behind one of the owners of Hathaway Bershire below.

Warren Buffett was born August 30, 1930. He is an American investor, businessman, philanthropist and one of the richest man in the world.

He is one of the world's most successful investors and the largest shareholder and CEO of Berkshire Hathaway.

Often called the "Oracle of Omaha", Buffett is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.

Toys for the richest people

When Buffett spent $9.7 million of Berkshire's funds on a business jet in 1989, he jokingly named it "The Indefensible" because of his past criticisms of such purchases by other CEOs. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500 and today, it is valued at around $700,000.

His first step to become the richest man in the world

At 13 years old, Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.

In his freshman year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

In 1949, he was initiated into Alpha Sigma Phi Fraternity while an undergraduate at the Wharton School at the University of Pennsylvania. His father and uncles also were Alpha Sigma Phi brothers from the chapter at Nebraska, to which Warren eventually transferred.

Failure turned into success for the richest man

At 20, Buffett applied for admission to Harvard Business School, but was turned down. He then enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.

Buffett discovered Graham was on the board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO's headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the vice president, who was to become a lasting influence on him and life-long friend.

They talked for four hours about the insurance business. Davidson recalled that he found Buffett to be an “extraordinary man” after fifteen minutes.

He graduated from Columbia and wanted to work on Wall Street. Both his father and Ben Graham urged him not to. Buffett offered to work for Graham for free, but Graham refused.

He purchased a Sinclair Texaco gas station as a side investment, but that venture did not work out so well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, "Investment Principles." The average age of the students he taught was more than twice his own.

Wish you'd be born the daugther or son of the richest man in the world?

He married Susan Thompson when he was 22 years old.

With her he had their first child, Susan Alice Buffett.

In 1954, Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss. Graham, who was a tough man to work for, was adamant that a stock provide a wide margin of safety after weighting the trade-off between its price and intrinsic value. Graham’s demand that a stock be worth more than its price made sense to Buffett, but it also made him question whether the criteria were too stringent, causing them to miss out on some big winners that had more qualitative values.

They had their second child, Howard Graham Buffett when he was 26 years old.

Benjamin Graham retired and closed his partnership.

Buffett's personal savings were now over $140,000.

The secret of the richest man

Buffett returned home to Omaha and created Buffett Partnership Ltd., an investment partnership. “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty. ” - Warren Buffet

Buffett had three partnerships operating the entire year. Buffett purchased a five-bedroom, stucco house at 5505 Farnam Street for $31,500.

At 29, they had their third child, Peter Andrew Buffett.

In 1958, Buffett had five partnerships operating the entire year. Then he had 6 partnership in 1960.

In 1959, Buffett was introduced to Charlie Munger. He had seven partnerships operating the entire year.

The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.

Buffett asked one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships' assets.

Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at "minus $20" per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing. Buffett revealed that he earned a spot on the board of Sanborn.

Buffett became a millionaire because Buffett's partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett. Buffett merged all of his partnerships into one partnership. In 1965, Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share. He was 35 years old.

When Buffett's partnerships aggressively began purchasing Berkshire, they paid $14.86 per share while the company had working capital (current assets minus current liabilities) of $19 per share. This did not include the value of fixed assets (factory and equipment).

Buffett took control of Berkshire Hathaway at the board meeting and named a new president, Ken Chace, to run the company.

Buffett closed the partnership to new money.

Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”

In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store.

Berkshire paid out its first and only dividend of 10 cents.

Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

In 1970 as chairman of Berkshire Hathaway, he began writing his now-famous annual letters to shareholders.

Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.

The SEC opened a formal investigation into Warren Buffett and one of Berkshire's mergers due to possible conflict of interest. Nothing ever came of it.

Berkshire indirectly purchased the Buffalo Evening News for $32.5 million. Antitrust charges started.

Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.

In 1987 at 57 years old, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.

Berkshire Hathaway purchased 12% stake in Salomon Inc., making it the largest shareholder and Buffet the director.

He bought one of the richest company

In 1988, Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

Even the richest people on earth have challenges

Scandals involving Greenberg and John Gutfreund (former CEO of Salomon Brothers) surfaced.

Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.

Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

In 2004, his wife, Susan, died.

His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies.

What does the richest man do with his money at the end of his career

Buffett announced in June, 2006 that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation.

In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps, successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

In 2007, he was listed among Time's 100 Most Influential People in The World. He also serves as a member of the board of trustees at Grinnell College.

Will he remain the richest man in the world? It doesn't matter.

In 2008 at 77 years old, Buffett became the richest man in the world, valued at $62 billion according to Forbes, dethroning Bill Gates, who held the title for fifteen years straight. Bill Gates had been number 1 on the Forbes list for 15 consecutive years.

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