Billionaire investor Warren Buffett, known for his frugal lifestyle, initially gifted his family members thousands of dollars in cash. However, after witnessing their tendency to quickly spend these gifts, he shifted his approach, the Fortune reported.
“As soon as we got home, we’d spend it, whoo!” the billionaire’s former daughter-in-law, Mary Buffett, who was married to his son Peter in 1980 told ThinkAdvisor.
Instead of cash, Buffett began gifting his family members shares in companies he had recently invested in, including Coca-Cola.
“Then, one Christmas there was an envelope with a letter from him. Instead of cash, he’d given us $10,000 worth of shares in a company he’d recently bought, a trust Coca-Cola had,” she said.
This strategy not only provided a more valuable gift in the long term but also served as an invaluable lesson in investing and wealth building.
His former daughter-in-law recounted how she initially intended to sell the gifted shares but ultimately held onto them, witnessing their significant growth.
“I thought: “Well, [the stock] is worth more than $10,000. So I kept it, and it kept going up.”
This experience instilled in her a long-term investment perspective, influencing her financial strategies.
Warren Buffett’s commitment to prioritizing long-term investments over short-term gratification reflects his philosophy of building wealth through patience and discipline.
At 94 years old, Buffett is well-known for his pledge to donate 99% of his wealth and not leave the bulk of his fortune to his children, stating he has “never wished to create a dynasty.” Dubbed the “Oracle of Omaha,” Buffett reiterated this stance last month while appointing three independent trustees to oversee his philanthropy after his three children stepped down, as reported by CNBC.
In a letter, Buffett explained his decision, writing: “I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence, and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?”
Buffett, whose children are now 71, 69, and 66 years old, has acknowledged the possibility that his wealth could take longer to distribute than his children may live. In addition to naming the trustees, he also donated $1.1 billion in Berkshire Hathaway stock to his family’s four charitable foundations.
