Interesting Things About Warren Buffet & His Divergent Values

Warren Buffet is an enigmatic man of extreme wealth with an intrinsic knowledge of how the stock market works. He combined this knowledge with certain principles, and teaches what appears to be sound ideas around saving, researching companies, living modestly, cultivating patience, and many other reasonable sounding values.

As a disclaimer, obviously I know nothing about his personal life, other than what is reported in the various magazine and newspaper articles. I have also listened to several of his own videos, in which he describes his values, background, and promotion of coca-cola.

Although it is reported that he came from humble beginnings, his father was a US Congressman, and also had his own brokerage firm. So one would assume Warren Buffet had an early introduction to how the stock market works. Depending on one’s perspective, this would not be viewed as a humble beginning by the average person, especially given the fact he was born in 1930.

For the average person, a Congressman father who owned a brokerage firm, is not something we grew up with. This is especially so for those who grew up during the depression, and mid-century post war era. A bright young person who is immersed in the behind the scenes workings of a brokerage firm, is likely to learn a great deal.

Most of us do not have a clear understanding of the inner workings of the stock market, other than knowing it can be volatile and unpredictable. It can also create portfolios of extreme wealth for certain people.

From the 1930’s to the 1950’s millions of young men in North America were forced to leave home with little more than the shirt on their backs, in search of work as labourers, just to survive. The depression era was especially harsh. Yet at age fourteen, it is reported that Warren Buffet had saved enough to buy a forty acre farm, even though he was born in 1930. 

He also had the benefit of a post secondary education, and worked for a period of time in his father’s investment company, before starting his own company. In the early years when his father was first elected to the US Congress, the pay would have been much less than it is now, but comparable in value, to what it is today. 

At this point in time, a US Congressman earns around $200,000 USD a year, along with expenses and other perks. If combined with owning an investment firm, the earnings may not be in the billions initially, but would be considered rich by most standards, and viewed as being born into privilege.

In addition, his father would have been positioned politically and financially, to take advantage of the lucrative post war financial opportunities. Apparently by 1952, he did not seek reelection, and chose to focus on his investment firm. He died thirty years before his wife died. It appears she inherited a massive stock portfolio, which she left to her children. 

It is not considered a fault or a weakness to be born into privilege, but it does give the person far more opportunities and stability, in order to become financially successful. Most people who are born into privilege for some reason, do not want to admit it. Or they downplay it, or leave it out of their bios entirely. 

The other contradiction, is the claim that he still lives in the modest home he bought in 1958. It certainly does point to conservative values, and long term stability. But in the 1950’s a gorgeous 6,570 square foot house, on three quarters of an acre, in the nicest area of Omaha, Nebraska – was not a modest home, by any standards. Even today, it would be considered a mansion by most standards. 

For the average person, in the 1950’s a modest home was around 1,000 square feet, usually with an unfinished basement. People would wait, and save for ten or twenty years to finish the basement. In the 1960’s wall to wall carpet became a sought after upgrade. When someone got wall to wall carpet, or finished their basement, it was the talk of the town.

He is well known for his philanthropy, yet the largest donation he ever gave was not to the poor and the homeless, but rather it was to the Bill & Melinda Gates Foundation.

However, Warren Buffet showed much generosity toward his two sisters over the years. When their father died in 1964, he removed himself from the will so his sisters could get his portion of the inheritance, which is reported to have been $184,000. In today’s money that would be around $1.8 million. The bulk of the inheritance would have gone to their mother. So clearly, Warren Buffet’s father was a wealthy man. He was also politically connected, which makes a difference. 

His father died at the age of sixty after a lengthy illness, possibly cancer. His mother died at the age of ninety-two. She remarried after her first husband’s death. 

Both of his sisters became very wealthy as well, and they did contribute a great deal of their wealth to various causes. They helped the poor, set up educational foundations, domestic violence support systems, and contributed to numerous charities. Much of their charitable work was supported, and encouraged by Warren Buffet. It was clear early in their lives that he wanted to see his sisters succeed, and do well.

He was also quick to acknowledge that the world of high finance is a man’s world. When their mother died in 1996, she left a massive fortune to her children. Her daughter Doris gave over 200 million to charities. The exact sum of the inheritance is unknown. 

Although his earlier family background was Presbyterian, apparently he now describes himself as agnostic.

From a health and wellness perspective, many of his values surrounding self discipline are incongruent. Yet he is ninety five years old, so obviously for him, it does not matter what he eats or drinks. He joked about eating like a six year old, with daily trips to McDonalds, and five twelve ounce cans of coca-cola per day.

In fact, he has been a strong investor of coca-cola for decades. He attributes it to his longevity. This goes against the grain of what we have learned about healthy living, but to each his own.

Throughout the day, he alternates between regular coke and cherry coke. Each twelve ounce can, or bottle, has ten teaspoons of sugar. As I have mentioned in earlier posts, most of us have some kind of addictive tendencies.

In addition to the coke, he typically eats breakfast at McDonalds, and lunch at Dairy Queen, with a preference for hamburgers, sausages, and potato fries. He is also reported to have a diet very high in salt. In addition to the coke, apparently he indulges in lots of candy. Ironically, he did not end up with sugar blues. 

His longevity must be related to genetics, disposition, and an ability to manage stress. On the healthier side, he is known to be an avid reader, a devoted bridge player, abstained from alcohol and tobacco, and sleeps eight hours a night.

Now that he is ninety five years old, and has accumulated more wealth than he can ever use, even if he eats his breakfast at a five star epicurean restaurant every day, surely he must wonder what will happen when he dies. Hopefully he will go back to his Christian roots, and start reading the bible.

The motivations surrounding the accumulation of extreme wealth are in some ways commendable, and in some ways pointless, or hedonistic and short-lived. He realizes the US dollar has lost its stability over the years, and is no longer the global leader it once was. He has witnessed the confidence draining, and the shifting to other currencies for more stability.

Historically what Warren Buffet has witnessed, and experienced, is an important documentation of the changes that have occurred in the past hundred years. Not only in the stock market, but political shifts, and in the almost certainty that what is behind us, is not always in the future. Predictable outcomes are on shifting sand. 

The exponential increase of debt, combined with the printing of money as a short term solution, rather than finding ways to reduce or pay down the debt, is something to be concerned about for future generations.

What the bible says about accumulating wealth it is not appealing to most people. We measure our success or failure in life based on how much wealth we accumulate, which often leans heavily on coming from a wealthy and successful family.

In biblical history there are many rich men to include Abraham, Isaac, Jacob, King Solomon, and Job. Regardless, all of them faced difficulties along the way. Wealth in itself does not bring condemnation. It is based on the attitude toward one’s wealth and how it is used. It is important not to make wealth the focus of life, because not all people are destined to be wealthy. If our needs are met, we are very fortunate.

What seems clear is that we are not to worship or love money. We are advised to be generous, especially toward the poor. We are instructed to be generous toward our own family members. We are advised to work, not to be slack, and to be grateful for what we do have. It is not about abundance, but rather giving thanks for all things, and remaining humble if wealth increases.

Luke 6:38

38 Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give into your bosom. For with the same measure that ye mete withal it shall be measured to you again.

Luke 12:15

15 And he said unto them, Take heed, and beware of covetousness: for a man’s life consisteth not in the abundance of the things which he possesseth.

Proverbs 10:4

4 He becometh poor that dealeth with a slack hand: but the hand of the diligent maketh rich.

Proverbs 10:22

22 The blessing of the LORD, it maketh rich, and he addeth no sorrow with it.

Proverbs 23:5

5 Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven.

Proverbs 18:11

11 The rich man’s wealth is his strong city, and as an high wall in his own conceit.

Proverbs 30:8

8 Remove far from me vanity and lies: give me neither poverty nor riches; feed me with food convenient for me:

Proverbs 11:28

28 He that trusteth in his riches shall fall: but the righteous shall flourish as a branch.

Proverbs 22:7

7 The rich ruleth over the poor, and the borrower is servant to the lender.

1 Timothy 6:10

10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

1 Timothy 6:17-19

17 Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy;

18 That they do good, that they be rich in good works, ready to distribute, willing to communicate;

19 Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life.

Hebrews 13:5

5 Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee.

Philippians 4:19

19 But my God shall supply all your need according to his riches in glory by Christ Jesus.

Matthew 6:24

24 No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.

Matthew 13:22

22 He also that received seed among the thorns is he that heareth the word; and the care of this world, and the deceitfulness of riches, choke the word, and he becometh unfruitful.

1 Timothy 5:8