“Price is what you pay. Value is what you get.” Ranked among the top five wealthiest people in the world, Warren Buffett is an incredibly successful investor, business magnate and philanthropist whose net worth exceeds $60 billion. Affectionately known as the “Wizard of Omaha” because of his Nebraskan roots and keen eye for business, Buffett has built his fortune as the chairman, CEO and largest shareholder of Berkshire Hathaway, a conglomerate that owns brands like GEICO, Dairy Queen and Fruit of the Loom in addition to holdings of American Express, The Coca-Cola Company and Wells Fargo, to name a few. So, with $66.4 billion to his name, you’d think that the beloved “cheese head” would have multiple estates around the world, right? Guess again!
The truth is, Buffett proves that massive wealth doesn’t always have to buy massive estates. Living by his mantra that “the first rule of investing is don't lose money; the second rule is don’t forget Rule Number 1,” the Sage of Omaha lives in an ordinary middle class house that he bought in his hometown of Omaha for $31,500 in 1958. That’s right! He has no beach getaways, no luxury cars and absolutely zero sprawling manors across the pond. Heck, he doesn’t even believe that people should have credit cards because it causes them to live beyond their means! To put it bluntly, Buffett lives and breathes practicality. After all, why buy an expensive house when you can spend less and live comfortably in a smaller, middle class abode? That’s how you don’t lose money, Warren Buffett style.
So how exactly did the famous billionaire get his start in the business and still manage to live a quiet life in Omaha without a gated entrance, constant security and over 10,000 square feet of living space? To answer that question, we have to look back to the very beginning of Buffett’s childhood and his unusual personal life.
Born on August 30,1930 to a stay-at-home mother and a stockbroker who eventually became a United States congressman, Buffett showed an early talent for mathematics at a young age when his parents noticed he could add and subtract large columns of numbers without using a pencil and paper. As he got older and spent more time visiting his father’s brokerage firm to learn about stocks, Buffett’s talent progressed and his passion for finance was born. Before long, he made his first investment at the age of 11 when he purchased three shares of Cities Service Preferred only to see the share stock price rise from $38 to $40, at which time he sold his shares and made his first successful investment.
Pleading with his father to let him join the business world rather than attend college, Buffett instead honored his father’s wishes and studied at the University of Pennsylvania and then at the University of Nebraska-Lincoln before seeing his interest in finance grow exponentially as he completed his Master of Science in Economics from Columbia in 1951. In the meantime, his personal life was blossoming as well when he met and fell in love with Susan Thompson after winning her heart by serenading her with the ukulele, which he admittedly played very poorly.
Marrying in 1952, Buffett continued to save on his $12,000 salary and purchased the couple’s home in 1958 for $31,500 just as Susan gave birth to their third child. Eventually separating after 25 years of marriage but remaining close friends until Susan’s death in 2004, Buffett married his longtime companion and family friend Astrid Menks (whose signature had long been seen alongside his and Susan’s on the family’s greeting cards) two years later.
A millionaire by 1962 and a billionaire by the early 1990s, the new millennium brought new investments and opportunities for Buffett who, despite struggling to rebuild during the economic crisis, announced he would give his entire fortune to charity upon his death. Six years later, in 2012, the billionaire was diagnosed with the early stages of prostate cancer and immediately underwent radiation.
Still in good health today as he continues to share his financial wisdom with the world while dabbling in politics, publishing numerous reports and articles and sharing a lifetime of stories, the 86-year-old Oracle of Omaha doesn’t give a second thought to purchasing another estate or spending more of his wealth. Instead, he says his Omaha home is “the third best investment” he’s ever made and only comes behind his and Susan’s wedding rings. Why? Determined to only purchase a home that he could afford as a young husband and father, Buffett says, “My family and I gained 52 years of terrific memories with more to come.”
So, other than decades of memories, what makes his home so special?
Absolutely nothing, which is exactly Buffett’s point. Modest in comparison to other homes in the neighborhood that boast million-dollar price tags, Buffett’s five bedroom, five full bath stucco home is nothing extraordinary and that’s exactly how it likes it. Valued at $652,619, the investor could easily sell his home and turn a huge profit but, after five decades of memories and a reputation to uphold, we don’t see it happening anytime soon. After all, frugality rules his world.