How Is Warren Buffett Spending His $80B Net Worth?

Hey guys, welcome back to the channel. In this video, we're going to be discussing exactly how Warren Buffett spends his billions. Warren Buffett, the Oracle of Omaha as he's referred to, he's currently the fourth richest person in the world with a net worth of 80.3 billion dollars. Surprisingly, he started amassing this wealth as early as age 11.

He was 11 years old when he bought his first stock, and as a teenager, surprisingly, he was actually raking it in. He was earning a hundred and seventy-five dollars a month delivering the Washington Post, and at 16 years old, he'd already saved over 53,000. But despite a very strong start as a kid, most of his wealth was obviously earned after he bought a controlling stake in Berkshire Hathaway, which is now run for a very long period of time. In fact, 99% of Warren Buffett's wealth he has earned after his 50th birthday.

But despite being one of the world's richest people, Warren Buffett surprisingly is quite frugal, and he always has been. So with that said, what exactly is Warren Buffett spending his billions on? Well, let's have a look, and let's start—why not? Let's start with cars and houses. You might be surprised that Warren Buffett is still living in the same house that he purchased back in the 1950s.

And boy, is it a mansion! You want to see it? Here it is. No, I'm just kidding; it's not actually a mansion. Here it is; this is his actual house. He bought this house back in 1958 for 31,500, and he has gone on the record multiple times saying that he believes this house is the third best investment he has ever made. Back in 1971, he did splash out a little bit, and he bought a vacation home in Laguna Beach, California for 150,000 US dollars.

But, you know, he got a little bit bored, and he sold it 47 years later for a cool 7.5 million dollars. But all jokes aside, this immediately shows you how frugal Warren Buffett is. He's not drawn like the other billionaires; he's not drawn to the big mansions and fancy cars. He's literally lived in the same house since he bought it back in the 50s.

And even when considering that house, he's always thinking about things like an investment. For him, that's turned out to be a fantastic investment. And why does he need this luxurious mansion? At the end of the day, the house that he's got is perfect for him. It's in the right location for where he needs to go to work, and it suits his needs. So that's the house that he lives in.

And then if we turn to the garage, the story is exactly the same. Warren Buffett is still very, very frugal. So there's no Lamborghini, there's no Ferrari, there's no Porsche. In fact, in 2006, he drove a Cadillac DTS, which had a starting price of 42,000 US dollars, and then he replaced that in 2014 with a Cadillac XTS, which originally started at 44,600.

So I think it's fair to say that Warren Buffett really isn't too interested in spending his billions on houses or cars. But what about his just general day-to-day lifestyle? Maybe he lashes out there. But nope, absolutely not. He's, of course, very well known for going on the record and saying that every day he goes through the McDonald's drive-through to pick up his breakfast, where he spends one of three amounts of money.

He either spends 2.61, 2.95, or 3.17. 2.61—that's for two sausage patties. 2.95—that's for a sausage egg and cheese biscuit. Or three dollars and seventeen cents—that's for a bacon egg and cheese biscuit. Then once he gets his breakfast, he goes into work.

And I'm sure you know, CEO of Berkshire Hathaway, he's probably whining and dining with investors and so on. But nope, he is very frugal in his day-to-day living here as well because he's gone on record saying that he pretty much just reads during the day. He reads for five to six hours a day. He reads five different magazines. He tries to read 500 pages of corporate filings, of annual reports, etc.

And that is just about his day. He then gets back in his Cadillac, drives home, and gets ready to do it again the next day. So I think overall, Warren Buffett's probably got to be the world's most frugal billionaire. He really doesn't spend his money on very much at all. The only, the single biggest luxury expense he's got is he does have a private jet.

And I find it quite funny because when he bought this private jet like 25, 30 years ago, he renamed it to be called the Indefensible. And the reason he called it that is because there's no defense as to why he bought it; he couldn't rationally explain why he bought it. However, what's very interesting is that he actually has renamed that plane since to now be called the Indispensable.

Because through owning that private jet, he has realized how valuable his time is and how efficient it is if you can cut down the amount of time you have to spend traveling. So anyway, as you can see, obviously, generally speaking, Warren Buffett is an incredibly frugal person, and that's why I really admire him. Like, he totally breaks the mold of your typical billionaire, right?

He's not living in big mansions or buying expensive cars or anything. I really admire Buffett because despite his massive amounts of wealth, he still values—and he says this multiple times—he still values his connections with other people, his relationships with people around him, much more than material possessions.

Now, with all that said, we've gotten to the point of the video. There is one category of expenses, and this is the biggest category of expenses for Buffett by far. This is definitely where the majority of his money gets spent, and luckily, it is in charitable donations.

What I find really interesting about this category of expense and the history behind his charitable donations— for the longest time, he was of the opinion where he would continue to invest his money because obviously he was very good at it. He would just wait and wait and wait and continue compounding that money until right at the very end, where he'd pull it all out and help people with it, just so that he could maximize his bang for his buck, right? He could compound that money right up until the last moment and have the maximum amount of money to play with.

But it was actually his late wife, Susie, that really changed his mentality around this and convinced him to spend more of his money and give more of it away sooner in his life. Unfortunately, it was her death that was the eventual catalyst for Warren Buffett to actually put this plan into action.

"It's something I've always planned. My wife Susie and I had planned that whatever I made would go back to society. Originally, I thought she would outlive me, and she'd make the big decision on it—the manner. But since her death, I had to rethink the best way to get the money into society and have it used in the most effective way. I had a solution staring me in the face, and I'd seen Bill and Melinda do what they have done with their foundation. They've done it with their own money; they poured themselves into it. The decisions are great; their goals are similar to mine. So the time is now."

On the 25th of June 2006, Warren Buffett, who at the time was the world's richest person, he had a net worth of about 62 billion dollars. He pledged to give away 37 billion dollars, most of which to the Bill and Melinda Gates Foundation, through a gift of 10 million Berkshire Hathaway class B shares, which at the time were worth just over three thousand dollars per share. Since that time, he's also pledged to give away more than 99% of his wealth, and he's been instrumental with Bill Gates.

They created the Gates-Buffett Giving Pledge, where essentially they go around and talk to the world's wealthiest and try to have them pledge to give away over 50% of their wealth. "In my entire lifetime, everything that I've spent will be quite a bit less than one percent of everything I make. The other 99% plus will go to others because it has no utility to me. So it's silly for me to not transfer that utility to people who can use it."

So there you go. That is how Warren Buffett spends his billions. He spends it on helping people that are in the worst possible situations in life. And that's why I really admire Warren, because there are so many billionaires that are in a similar situation to him where, you know, their whole lives, they've basically just been sitting down, you know, reading annual reports, buying and selling stocks, and then eventually they amassed this extraordinary wealth for themselves.

And then they just retire, live a life of luxury, never have to lift a finger again, and become the richest person in the cemetery essentially. But Warren Buffett definitely isn't like that. Yes, he sits down, yes he reads annual reports, yes he buys and sells stocks, and yes he amasses incredibly large sums of money for himself. But his reasons for doing so are actually really admirable.

He doesn't need any of that money for himself. In fact, his lifestyle, his day-to-day lifestyle, probably costs less than yours—that is if you exclude the private jet. But he has all the money in the world, yet every weekday he still shows up to work. He doesn't need to; he can retire a million times over if he wants to.

But he still shows up to work, not because he wants to make himself richer, but quite simply because he wants to give back. He wants to, first of all, help Berkshire Hathaway shareholders become more financially secure. And he also wants to amass as much personal wealth as possible so he can do those big charitable contributions, so that he can help out those that are really doing it tough—that have the worst lot in life.

And that's why I think that Warren Buffett really is a billionaire that you can look up to. Despite being the fourth richest person on this here planet Earth, most of his money is just going to be completely given away, and it's used to help people that are in much, much worse situations than the vast majority of us.

So anyway, guys, that is it for this video. I'd love to hear from you guys. I'd be really interested to hear a comment from you guys below: If you had 80.3 billion dollars net worth, what would you use it for? Or rather, what issue would you use that money to try and help solve? Would it be, you know, poverty or climate change or something else? I'd be really interested to hear what would you use that vast amount of money for because there's no way in the world that you, as one individual, could spend 80 billion dollars. It's simply not possible, right?

So I'd be really interested to hear. Leave a comment down below: What would you use that money on if you had one issue in this world that you could use that sum of money to try and solve? What issue would you pick to take on?

Anyway, guys, that is it for this video. Thanks very much for watching. Make sure you leave a like on the video if you did enjoy, or if you found it useful. And if you are someone that loves stock market investing and you would like to learn Warren Buffett's strategy—his stock market strategy—then make sure you check out the links down in the description below.

That will take you straight over to Profitable. Check out Introduction to Stock Analysis because in that course, it's an eight-hour course where I just basically go through a walkthrough of Warren Buffett's investing strategy that has, let's face it, helped him out quite a lot over the course of his life.

Anyway, guys, that's it for me. Thanks very much for watching, and I'll see you guys in the next video.