Warren Buffett's Original Plan Involved Living Off His Interest and "Reading"

Warren Buffett made his own rules - Illustration.If things had gone just a bit differently, there is a very good chance that you would have never have heard of the "Oracle of Omaha", Warren Buffett.

You see, Warren Buffett's original dream wasn't to run Berkshire Hathaway, one of the largest conglomerates in the world.

Instead, Buffett simply wanted to manage his own money and retire at the age of 25.


If you are familiar with the story of Warren Buffett's life, you know that:

1) He was very good with money from a very young age

2) He despised working for anyone else

Buffett made a name for himself early on in his career, and he had opportunities presented to him that other people would have jumped on and happily done for the rest of their lives.

Instead, Buffett wanted to do his own thing. He didn't want to sell stocks to other people. He didn't want to join a partnership.


At the end of 1955, Buffett and his young family had $127,000 in assets.

This translates into about $1.2 million in current dollars.

Buffett's plan was to nurture his own money and simply live off of the interest. Buffett figured that he and his family could live off of $12,000 per year, and he would spend his time growing his capital, taking some college courses and "reading".

That was the plan. At the age of 25, Buffett was content with simply reading and learning and investing. He was going to retire.


Around this time, a number of family and friends approached him about managing their money.

Buffett offered them the opportunity to join a partnership - a partnership that would be run under his rules.

The members of the partnership wouldn't know what they were investing in.

Word would leak about Buffett's fantastic returns, and more money flowed into the partnerships.

The structure of the partnership (Buffett would keep 50% of the profits over a predetermined hurdle rate) meant that Buffett would accumulate a large amount of money in a very short period of time.

The partnerships would grow and eventually be consolidated into a single partnership.

This partnership would eventually invest in (and ultimately take over) Berkshire Hathaway, and the rest is history.


Warren Buffett very nearly retired at the age of 25, never to be heard from again.

Filed under: General Knowledge

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