Warren Buffett. He's known as The CEO/Chairman of Berkshire Hathaway, The "Oracle of Omaha," and as one of the richest people in the world. Of the three richest people, though, he's the hardest one to pin down. Bill Gates is the Computer Dude, Jeff Bezos is the Amazon Guy, and Buffett does ... something with stocks, maybe? For regular folks, Gates and Bezos are understandable. But what Buffett does is more complicated. The best way to describe it is that he's in the money business.
Buffett was only ten years old when he decided to make money the focus of his life.
By the time he was 16, he had saved up the equivalent of $53,000. After that, things kind of snowballed, and these days, he has a net worth of $89 billion, give or take a couple of billion, depending on the day. Forbes ranks him as the third richest person on the entire planet.
Don't confuse rich with greedy, though. Buffett actually gives as good as he gets. He's one of the world's most generous philanthropists, and in 2010 he co-created the Giving Pledge organization with Bill and Melinda Gates, campaigning for the super-rich to give the majority of their wealth away to good causes. In fact, Buffett might be the richest person in the world today if he hadn't given away more than $27 billion in just the last decade alone.
Can you imagine what it's like to juggle such massive amounts of money? Even the number 89 billion itself is too large for human beings to really understand. In order to break it down to an amount we can identify with, we have to look at a much smaller figure — like, for instance, the amount of money Buffett makes in a single day.
It's obviously difficult to estimate the exact daily earnings of Warren Buffett. He's an investor, which means that some days might not turn massive profits, while others could rake in truly incomprehensible amounts of cash. Besides, he earned the bulk of his fortune after he turned 50, so there really is no point counting the average earnings per day.
Instead, let's look at his average daily earnings during a year we have figures for: 2013, when according to CNBC, Buffett enhanced his net worth by no less than $12.7 billion. During this year, Buffett made a frankly absurd $37 million per day — which is a lot of popsicles!
That translates to roughly $1.5 million per hour — even during the hours when he was sleeping. And that translates to $25,000 per minute, or roughly $416.67 every second, which is more than some people earn in a 40-hour work week.
Those are certainly some mad figures, but could your average Joe earn as much as Warren Buffett? The man has been at it for many, many decades now, so surely, the world has uncovered his money making secrets, right?
Well, there's some good news and some bad news. The good news is that Buffett's money-making method is hardly a secret. Despite his nickname, the Oracle of Omaha does not magically recognize a successful stock and go all in until the billions start rolling in. Instead, he simply invests in stocks with low, yet stable returns, which sounds like something your grandmother might do if she got in the investing game. Easy enough, right?
Well, here's the bad news: Buffett's strategy has a second, much more exclusive part. These days, for his investments he uses other people's money in order to lower his risk and maximize his returns. See, when you're a powerful billionaire, financing establishments will climb over each other to offer you cheap loans — after all, they know you have the money to pay them back. In fact, Buffett doesn't necessarily even need loans, per se, as he can get the equivalent amount of cheap cash from collecting insurance premiums up front, or by using Berkshire Hathaway's no doubt considerable tax deductions as "loans."
Some of that starts to sound like mumbo jumbo, but don't worry — even if you understand it, chances are you wouldn't have the kind of leverage and reputation needed to actually do it. That's something Buffett has built up over a lifetime — and it's the real secret of his incredible money-making prowess.
#WarrenBuffett #Billionaires
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