Money Listens

Quick now, who is the world’s richest person? Bill Gates, right? Wrong. It’s Warren Buffett. This year Forbes magazine named him the world’s richest person. Who? He’s the 77 year old CEO and largest shareholder of Berkshire Hathaway, a wildly successful company. He is arguably the greatest stock market investor of all time. He’s known for his frugality, despite having a net worth of over $60 billion dollars. Yes, you read that right, billion. His annual salary is about $100,000 which is pretty low so far as CEOs go. He still lives in the same house in Omaha, Nebraska that he bought for $31,500 in 1958. (Most of this info is from Wikipedia. )

I’m giving you this background so you’ll sit up and listen to what he says. He knows his stuff. Last weekend he held a question-and-answer session at the annual meeting of Berkshire Hathaway. CNBC dubbed it Buffettstock ‘08.Over 31,000 rabid fans (shareholders) attended the meeting. Hence the wordplay on Woodstock. And you know Omaha isn’t exactly a major tourist destination. You can read a transcript of the meeting at CNBC.com. Here are a few of the answers he gave in that session:

Buffett says any money he’s given to charity hasn’t really affected his life because he’s given from his surplus. He admires those with much less who still give money and time to others.

How would you invest your money if you were just starting out and were not a full-time investor? Buffett’s answer: a low-cost stock index fund with a company like Vanguard.

What advice would you give to children on finances? Buffett says generally children will follow the example of their parents, and will be sensible if the parents are sensible and live within their means with an eye to the future. He says it may sometimes be best to spend money on some things when you’re young, such as a trip to Disney World that can create memories for your family. “I do not advocate extreme frugality.”

If you want to go to the meeting next year, you’ll have to buy at least one share of company stock. It’s on the NYSE, symbol BRK. Last time I checked, one share was trading at $129,990. Or a Berkshire “Class B” Share is a mere $4,500. Start saving your money.

This entry (Permalink) was posted on Tuesday, May 6th, 2008 at 10:43 am and is filed under Educate Yourself, Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response , or trackback from your own site.