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The remarkable life of Warren Buffett has been full of shrewd investments that led him to briefly become the richest man on Earth, before promptly giving most of his fortune to charities fighting to halt climate change and eradicate poverty and disease. While he continues to accumulate wealth through his tremendous knowledge of the stock market, and is widely revered as the most influential figure in investment history, he continues to donate billions to philanthropic causes while inspiring others to follow his lead, a True Superhero of philanthropy as well as investment.

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The bottle cap researcher

Warren was born in 1930 in Omaha, Nebraska, and from an incredibly early age he was displaying the qualities that would later make his fortune. Warren didn’t just have a prodigious talent for numbers, he was also determined to make use of those skills to make money in any way he could. In the beginning, this meant hanging around gas stations collecting discarded bottle caps. While his contemporaries played, seven-year-old Buffett was doing market research, diligently logging the brands of the bottle caps he found and taking note of which brands sold best in which areas. The answer was predominantly Coca-Cola, so the young entrepreneur went to his uncle, who ran a local grocery store, and cut a wholesale deal to buy crates of six Cokes for a quarter. He then hit the streets selling the bottles door-to-door for a nickel a piece, making a tidy profit in the process.

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Buffett would later lament that he did not invest those profits in Coca-Cola shares, which would have paid him handsome dividends down the years. He did not waste his funds though, choosing instead to plow his profits back into an ever-increasing roster of investments and business ideas. He bought his first stocks aged 11, and when he turned 13 he took on a paper route which he approached with typical entrepreneurial hustle, keeping track of the magazine subscriptions of the houses on his route and then selling renewals to his customers. By the time he was 15, he had accumulated over $2,000 from the paper route alone, and he kept the proceeds in a jealously guarded sock drawer which was only ever opened to fund further projects. One such investment was to buy a farm when he turned 14, which he rented out to a Nebraska farmer in a profit-sharing agreement. He then turned his hand to the amusement industry, installing pinball machines in local barber shops and reaping the enormous profits from the burgeoning craze before disaster struck: his father informed him that it was time to abandon his many hustles and head to college. 

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Becoming the Sage of Omaha 

Warren complained bitterly about being forced to continue his education; he saw no upside to it and wished only to pursue his business ideas, but his father was adamant. Thanks to his extracurricular activities Warren’s grades in high school had been “good, but not great”, but he applied to Harvard Business School with a great deal of confidence. To his surprise, they rejected his application and so he hurriedly approached Columbia University. The acceptance letter came so late there was no time for Buffett to find accommodation and he stayed in the local YMCA, but the hurried outcome proved serendipitous as it connected Warren with one of his idols, Benjamin Graham, who was known as “the father of value investing” who was teaching at Columbia at the time. Graham would eventually offer Buffett a job and mentored the young investor - Warren even named his first son, Howard Graham Buffett - after his idol, but Buffett’s fortune would be made elsewhere. 

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One Saturday in 1951, Buffett went to the offices of GEICO, hoping to find Graham there. Instead, he found Lorimer Davidson, GEICO’s vice president; Davidson found the young man fascinating and gave him an impromptu crash course in the insurance industry. Buffett was very taken with this new field of business and promptly invested half his net worth in GEICO shares, cashing out a year later with a tidy 50% profit. This would prove to be a mistake as GEICO’s shares continued to rise and many years later Buffett would buy into GEICO again, this time buying up the entire business through his holding company Berkshire Hathaway. 

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The $200bn mistake

Berkshire Hathaway had originally been formed as a merger between textile businesses in 1955, but by the early ‘60sthe firm was failing and slowly closing its many mills. Buffett began buying up its stock after he noticed that the firm would typically buy back its shares after closing a mill, and two years later this came to pass, with the firm’s owner, Seabury Stanton, making a verbal offer to buy back Buffett’s holding at $11½ per share. Unfortunately, when the tender offer arrived the offer price had dropped to $11⅜. Infuriated, Buffett instead bought more of the firm’s stock, assumed ownership of the firm and then fired Stanton. He was now the owner of a failing textile business and over the course of the next 20 years he tried to revive Berkshire Hathaway’s core business without success. He would later claim that this decision cost him $200bn because the money he wasted in trying to revive the textile business could instead have been used to fund Buffett’s other, more profitable investments. The great irony is that these were all carried out in Berkshire Hathaway’s name, and by 2008 the success of the non-textile related operations of the firm led to Buffett having a personal net worth of $62bn, making him the richest man in the world at that time. 

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By this point, Buffett had started to give his wealth away. In 2006 he announced a plan to gradually donate almost all of his total worth to charity, with the vast bulk of it going to the Bill & Melinda Gates Foundation. Bill Gates had credited Buffett with being the inspiration behind the foundation in the first place, and now Buffett was putting his money where his mouth was, with an initial gift of Berkshire Hathaway shares worth $30.7bn, the largest charitable donation in history, and an enormous boost to the Foundation’s goals of combating climate change and eradicating global poverty and disease. Buffett resigned as a trustee of the Foundation in 2021, by which point his annual contributions to the fund had totalled over $41bn, half of his overall net worth. This was a significant milestone for Buffettas he and Gates were also the instigators of the Giving Pledge in 2010, which encourages other high net worth individuals to pledge half of their total wealth to philanthropic causes. By 2016 an estimated $600bn had been pledged, and the number of signatories to the Pledge grew year on year, with 236 pledges coming from donors in 28 countries by 2022. 

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Although Buffett has already fulfilled his obligations as laid out in the Giving Pledge, he continues to donate his tremendous wealth to philanthropic causes, with much of it now being channeled through his own Buffett Foundation, which focuses on healthcare research and advocacy. While he is determined to give his entire fortune away, he continues to be an extremely successful and influential investor, making money faster than he can give it away; by 2022 his net worth has increased to $106.6bn, although this now only qualifies him as the world’s seventh wealthiest person. Being unable to give your money away fast enough is an unusual challenge to face, but Buffett’s uncanny ability to see the future of stocks continues to fuel worthwhile causes around the world, a True Superhero of philanthropy who continues to inspire and support millions of people.

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