The surprising programme Warren Buffett credits his success to
It’s evident that Warren Buffett is gifted in business and investments, but he credits his success to his education.
Known as the “Oracle of Omaha” with a current net worth of 103.8 billion US dollars, Buffett is one of the most successful investors of all time.
Pundits believe 94% of his wealth were earned after he turned 60, but did you know that by the time he was 16, he had already earned what would currently be worth US$53,000?
The American business magnate, strategic investor and generous philanthropist has clearly come a long way since beginning his own venture at the age of six or buying his first stock at 11.
Since his journey to becoming the most successful and impactful investor of the 20th century was a long and illustrious one, let’s start at the very beginning.
A natural-born hustler
According to Alice Schroeder’s 2008 biography, “The Snowball: Warren Buffett and the Business of Life,” Buffett’s personal savings account began in a sock drawer.
He began exhibiting his entrepreneurial traits by selling sticks of gum around his neighbourhood, selling them in packs of five for a nickel.
“We don’t break up packs of gum — I mean, I’ve got my principles. I still, to this day, remember Mrs. Macoubrie saying she wanted one stick. They were a nickel and she wanted to spend a penny with me,” he told Schroeder.
Buffet would eventually boost his revenue by selling Coca-Cola – a company he now owns US$21.7 billion worth of shares in – door-to-door during the summer.
At 11, he learned the art of patience, having bought three stock shares of Cities Service Preferred for US$38 and selling them when they increased to US$40. He continued to monitor the stocks, finding that they continued to increase in price before remaining stable at US$200.
Then, at 13, he got into the newspaper business and a paperboy. He would wake up at 4:30 a.m. to deliver The Washington Post to houses along his route. He was also selling his own horse racing tip sheet. In this same year, he filed his first tax return, claiming a US$35 deduction for his bike.
At 15, he had already saved up US$2,000. He didn’t spend his earnings as a regular teenager would. Instead, he invested US$1,200 in a 40-acre farm, in agreement with a Nebraskan farmer. He also began Buffet’s Used Golf Balls, Buffett’s Approval Service, and Buffett’s Showroom Shine – amongst a couple of other ventures.
At 17, as a student at Woodrow Willson High School in Washington, D.C., Buffett and a fellow student purchased a second-hand pinball machine for US$25 and installed it in a barbershop. In a few months, they made enough profit to set up machines in two other locations. He eventually sold the business for US$1,200.
The education of Warren Buffett
Buffett graduated from Woodrow Willson in 1947. His senior yearbook picture read: “likes math; a future stockbroker.”
Although he was eager to remain an independent entrepreneur, his father urged him to choose the academic route. So at 16, Buffett chose to pursue a business degree from the Wharton School of Pennsylvania before completing the last two years of his degree at the University of Nebraska.
He graduated with a Bachelor of Science in Business Administration in 1951.
According to a recorded keynote address, Buffett stated that he “enjoyed every minute” of his time at Nebraska. He commended his “terrific” professors and noted that the business skills he developed at the university have given him a competitive edge throughout his career.
After being rejected by Harvard Business School, he opted for an advanced degree from Columbia Business School of Columbia University.
He studied economics under Benjamin Graham – otherwise known as “the father of value investing”. According to CNBC, Graham played a significant role in shaping Buffett’s career and investment philosophy.
After graduating from Columbia in 1951, Buffett furthered his education at the New York Institute of Finance.
Immediately after, he began his career as an investment salesperson. In 1954, Buffett’s mentor, Graham, offered him a job for US$12,000 a year at Graham-Newman Corp.
Two years later, Buffett formed Buffett Partnership Ltd. in Omaha. However, Buffett set his sights on textile company Berkshire Hathaway. So he began accumulating stock in the early 1960s.
By 1965, he was in full control as Charmain and CEO – a position he holds till this day. Last year – in light of a global pandemic – the company still generated US$245.5 billion in revenue. It owns businesses in insurance, rain transportation, energy generation and distribution, manufacturing, as well as retailing.
While advanced qualification helped Buffett dive deeper into the art of doing good business, a thriving career never stopped the Presidential Medal of Freedom recipient from taking his knowledge further.
Buffett credits his confidence to the “Dale Carnegie Course in Effective Speaking, Leadership Training, and the Art of Winning Friends and Influencing People”, which he participated in as a young professional in 1952. In his office, this academic certificate is reportedly the only one on display.
He told CNBC: “That $100 course gave me the most important degree I have. It’s certainly had the biggest impact in terms of my subsequent success.”