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This Is How Warren Buffett REALLY Made 85 Billion Dollars

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Warren Buffett, also known as the Oracle of Omaha, is undeniably one of the most successful investors of all time.

With a net worth of $85 billion, he has surpassed the likes of Bill Gates and Jeff Bezos to become one of the wealthiest people on the planet. But what is the secret behind Buffett’s immense wealth? How did he manage to amass such a vast fortune? Here, we take a closer look at how the legendary investor made his billions.

First and foremost, it is important to understand that Warren Buffett’s success did not happen overnight. It took him decades of hard work, dedication, and disciplined investing to reach where he is today. Buffett’s journey began in his early teens when he started learning about investing and stock markets. At the tender age of 11, he purchased his first stock and by the time he was 13, he started his own business selling magazines door-to-door.

But the real turning point in Buffett’s life came when he met his mentor, Benjamin Graham, widely regarded as the father of value investing. Graham’s teachings, particularly the concept of “intrinsic value,” had a profound impact on Buffett’s investment philosophy. Intrinsic value refers to the actual worth of a company based on its cash flow, assets, and long-term potential, rather than its current market price.

Following in Graham’s footsteps, Buffett started his own investment firm, Buffett Partnership Ltd., in 1956. He continued to apply Graham’s principles of value investing, which involved buying undervalued stocks with strong fundamentals and holding them for the long term. This strategy paid off handsomely for Buffett and his investors, with an average annual return of 29.5% over a 13-year period.

But perhaps the most significant event in Warren Buffett’s career was his acquisition of Berkshire Hathaway, a struggling textile mill, in 1965, which marked his transition from an investor to a business owner. Despite the struggling textile industry, Buffett saw an opportunity in the company’s insurance subsidiary and gradually shifted the focus of Berkshire Hathaway to the insurance and investment sector.

This proved to be a game-changer for Buffett as the insurance business provided a steady stream of cash flow, which he then used to diversify his portfolio and invest in other companies. Some of his most successful investments include Coca-Cola, American Express, and Apple, which have contributed significantly to his fortune.

But what sets Buffett apart from other investors is his uncanny ability to pick the right companies and hold onto them for the long term. He famously said, “Our favorite holding period is forever,” and has stuck to this philosophy throughout his career. This has allowed him to reap the benefits of compounding, where his profits from successful investments are reinvested, leading to exponential growth over time.

In addition to his investment strategy, Warren Buffett is also known for his frugal lifestyle. Despite being one of the richest people in the world, he continues to live in the same modest house he purchased in 1958 and drives a 2014 Cadillac XTS, which he bought for $45,000. This frugality has allowed him to save and invest the majority of his wealth, rather than splurging on lavish expenses.

In conclusion, Warren Buffett’s success can be attributed to a combination of factors such as his investment philosophy, business acumen, and disciplined approach to managing his wealth. He has shown that with the right mindset, dedication, and a long-term approach, anyone can achieve financial success. As he famously said, “Risk comes from not knowing what you are doing.” And Buffett’s success is a testament to his extensive knowledge and understanding of the investment world.