We should never idolize a person (in my opinion). Here are some things Buffet has done that I admire (notice that phrasing):
- He consistently communicated with shareholders of Berkshire in a straight-forward and transparent way in his letters and annual reports. If you read these documents, I believe that you will have a solid understanding of how he built Berkshire.
- He maintained a disciplined approach to investing and managing risk over 60+ years.
- He still lives in the same home he bought when he was 28 years old.
Our society has become moralistic. It's so much more useful to identify behaviors to learn from - either to emulate or to avoid - than to debate whether various public figures are good or bad people.
That said, it makes me a little sad that we've read the last of his annual letters.
I think moralism is an side effect of the demise of spiritualism in the west. We somehow have to shape moral values, the lack of a framework for it makes it feel blunt and chaotic.
That being said, I find it odd to moralize on moralism. We have way too many people in power that are awful humans and do a bad job and never get punished.
Meanwhile, stealing a car because you are hungry can be the begin of a ruined life.
There is no balance.
(This isn't about buffet, idc, just about your interwoven opinion.)
The point is that moralism makes everyone blind and see in black and white.
Instead of seeing the nuance, you’d see everything that comes out of Elon Musk or Israel whoever you’ve managed to convince yourself is that current villain, as bad - without attention to details. More than that - you’d waste your time arguing whether they are “good” or “bad”, instead of focusing on specific actions, which is what society as a whole seems to enjoy seem to gravitate towards, and what increases polarization and reduce proper discourse.
I have a huge problem with your use of "moralism" as a term. For me it appears to be used pejoratively as an act to weaken the concept of morals at large. (Which isn't your invention but something you probably picked up.)
We made a machine that is driven by emotions and rewards short and exaggerated interactions. On the surface it's black and white, but in each such situations there is also nuanced discussions and people that reflect things. I often also carry such moral debates to friends, I assume others do as well. There is at least a portion of nuance. Saying it's always black and white, is black and white thinking itself.
What I would agree with is that groupthink is a problem. People choose sides depending on who or which group said it. Also virtue signalling, as it's often just (unconscious) reputation management and hinders progress.
You are clearly describing "villainizing" people or groups. This is actually the opposite of moralism, which would be criticizing specific violations of morals.
Moralism can make people see things without nuance (i.e. saying "stealing is bad" with no regard for the context). This must be tempered. But this is not a good reason to throw out the pursuit of shared moral values within society.
It's pretty strange to see "whoever you've convinced yourself is the current villain" next to, you know, actual villains. Who do you think qualifies to be an actual villain, if they don't?
Yes, we seem to lack the framework and vocabulary to discuss morality anymore. You may be right that this is tied to the demise of spiritualism (or perhaps organized religion).
> We have way too many people in power that are awful humans and do a bad job
When was this ever not the case? And what makes you think that you (or any other human) are somehow morally superior and would do a better job if subject to the same environment and pressures?
The point is that power corrupts, so we try to design decentralized systems wherever possible that don't require absolute power to function (ie. free markets, the internet, etc). Trusting specific human animals to wield authority over us in a non-awful way is not a reliable solution.
> Meanwhile, stealing a car because you are hungry can be the begin of a ruined life.
Sure, but the overwhelming majority of people who steal cars are not starving. And thinking that being poor makes someone morally superior is simply an argumentum ad lazarum, one of the oldest logical fallacies going back to biblical times.
> And what makes you think that you (or any other human) are somehow morally superior and would do a better job if subject to the same environment and pressures?
Morals are necessary for humans to live together. We all shape them, we are all entitled to do so, they are inevitable. We encode morals into laws if we deem it necessary. But that doesn't originate from an individual in a functioning democracy. It's a process, not a individual decision. Each individual can decide to stand for it's own morals. A large public backlash is a sign that you acted against public morals, you don't have to agree, but you have to deal with it. That's how a society works if everyone is free to speak and has a tiny bit of power.
> Sure, but the overwhelming majority of people who steal cars are not starving. And thinking that being poor makes someone morally superior is simply an argumentum ad lazarum, one of the oldest logical fallacies going back to biblical times.
I didn't mean any of that, I don't even know how you come up with that conclusion. My example simply expresses that a simple act of theft can ruin a persons life, while powerful people cause much more damage and get away with it.
(opinion) current "democratic" systems structurally have a tendency to put the worse people at the top (amoral/immoral/corrupt etc.). with that assertion, swapping to random people would probably prove an improvement.
It depends on how much you believe other people’s stated public persona.
If you believe it, then it helps model other areas of life in a way that undoubtably supports the outcome.
For example, not part of Mr Buffets persona (and I believe it!) is staying up until 2am getting wasted and having 5 baby mommas.
And so anyone trying to have even a shadow of Mr. buffets success should probably also avoid doing so, and perhaps do some of what Mr. buffet does instead. Like reading the financial papers.
Yes of course there's only one way to have a succefull life and one should just follow what others before them have already done, in order to be successful, who needs to think for themselves and make choices, just read the financial papers make a lot of money and then when you are dead and forgotten by the world at least you will have all your money to comfort you in the afterlife
Notably, Mr. Buffet didn't do that (per-se). But he certainly copied a bunch of habits which apparently worked for him. Or not. Who knows.
You can't get much beyond the median if you copy other people, unless you're really lucky. But if you handicap yourself constantly too, good luck even hitting the median.
> He still lives in the same home he bought when he was 28 years old.
What does “living” mean in this case? That can mean absolutely nothing. I travel a lot (and probably Buffet too), and tax authorities would have a headache with what should I pay and to whom if I reported it completely to them when and where I am. In the country where I officially live I’m maybe 20-30%. There is no other countries with more. The simple case of 50%+1 days is nowhere near. In Buffet case, it can be even less. 10 years ago I had a different pattern. I wasn’t at home but in the same country (in the case of the US, like a state) at random places like 80-90%. So does Buffet really live there, like properly?
The last one is key to my entire value system as a person. I have had some financial wins in life and try not to let it impact my day to day. I avoid, sometimes with great effort, flashy things (I’ve been tempted to by exotic cars as an example but have found if I just rent one for a day or two that urge goes away, it’s just a toy to me). I usually say I’m not materialistic, but I am at times, and what I strive to be is humble, modest, and invisible. I don’t want other people seeing me as flaunting wealth. It’s not who I want to be or how I want my kids to see me act.
That said, I do, like Buffet, live in a nice house. I’m not depriving myself. But it’s also very approachable by any successful employee of a company (maybe salary of a director or VP of any large company could afford it). It doesn’t represent what I could afford if I wanted to really get into the elite neighborhoods of my city. I don’t really enjoy people in those areas. They tend to always talk about money in one way or another (vacations, private schools, cars, houses, maids, nanny’s, etc). Nothing wrong with it I suppose, just not my jam and not how I want my children raised and not the people I want as my neighbors and peers. I’ve always been much more envious of those unsuspecting rich people that drive clunker cars or live in modest homes and mow their own lawns but then you find out they paid for 16 grand children to go to college or something random like that. That’s the kind of thing I’d rather be known for than the guy with the Ferrari or yacht (even if they weren’t mutually exclusive).
Modern society is too narrow minded about what wealth means. To most people it means fancy watches, cars, homes, etc. To me wealth is about time and freedom. I can pick up the tab at dinner for a group of 12. I can afford to keep my 1972 Schwinn bicycle in tip top shape or my grandfather's jacket mended when it breaks. I can afford to rent forever if I want. I'll never work a job I don't like, I can just quit. I feel more wealthy this way than if I owned 3 lambos and had to work to make ends meet.
Exotic cars are designed to be fast and fun to drive, for people that enjoy driving. You can still find them fun even if you dislike showing off. There are even some great exotic cars that look normal enough on the outside that a non car enthusiast won’t recognize them as anything unusual.
FWIW Nobody I know sees me rent these cars. I usually do it while on vacation. They’re fun to drive, so it’s closer to an occasional hobby than a complete change of my lifestyle
I dont judge, you are free to do however you please, but dont act like renting expensive car is a normal human thing to do and has nothing to do with bragging about how much money you have. Its a rich person hobby.
Still feels like you're blowing it out of proportion and are judging my hobby and reading into my post as braggadocios (which it was meant to be very matter of fact and kind of the opposite if you read any of it besides what I admitted to as my indulgence). Very average income/wealth people have hobbies that cost them a couple thousand dollars a year and we all choose our own hobbies. I don't golf and there are millions of golfers that spend the same or perhaps way more as an example. I don't drink alcohol and I would guess a large portion of US adults spend more annually on beverages than I do on that one "hobby". Damn near everyone travels and that's essentially a hobby. Plenty of people go deep sea fishing or whale watching on rented yachts. I could go on but are you judgmental on their "rich person hobby" like you are of mine?
Edit: I rarely do this with HN but I'm getting troll vibes from you and so I clicked on your comment history where you lay out your unfortunate financial situation in a comment ("I have 500€ in my bank account, 3k debt and 30 years of work left ahead of me") and it all makes sense that you are just resentful or jealous. My only constructive advise is you should try not to have this attitude on HN, there are plenty of wealthy or good-to-know people here and any chance conversation could turn into something that shifts your life's trajectory. If the breadcrumbs show that you're just a troll you're basically building a wall between you and those people.
HN is a shithole with tons of pretentious people so I'll avoid HN for any opportunities. I am resentful of people with a lot of money who use it for temporary amusement over making the world a better place. Far from jealous though, as I am content with my income. I couldn't care less about good-to-know tech bros.
People seem to dismiss the value of humility and frugality nowadays, but I see them as important virtues that lead to a more enjoyable life. Counter intuitively, wealth can allow someone the freedom and privilege to live a simpler and more frugal life, which can feel more rewarding and fun.
For one, I like to have a connection with the place I live and the physical objects I use like my car and home- the fact that they are old things I fixed up and maintain myself gives me a sense of place, connection, and pride- just buying something expensive that someone else prepared for me would feel infantalizing and unsatisfying. I enjoy deeply understanding and being part of the history of the objects and tools I use, in a way that can’t be purchased.
Also, I think a lot of consumerism and conspicuous consumption comes from a sad and depressing place of anxiety that you aren’t good enough to make friends or find romantic partners without doing this. Many people don’t directly want or enjoy conspicuously expensive things, but are hoping it leads to social status or approval. But this inevitably means resigning yourself to essentially buying the company of people that don’t actually like you. At the extreme end you see some famously wealthy people so anxious about not being perceived as wealthy enough that they glue tacky fake plastic gold on everything they own because they’re afraid of looking poorer than billionaires. That type of narcissism is not a happy way to live, and will turn off the kind of people that would have built a genuine emotional connection with you.
Well said! A large part of my ethos is not caring what people think of me. As in, random people that don’t know me or try to make guess of my social status based on what signals I’m putting out. I care about what some people think about me, but not my financial situation more so what they think of me as a human.
Avoiding scaling your lifestyle with tour current wealth seems like an extremely important lesson people could learn here. Very few people know what "enough" means to them.
Its probably worth noting that I mean "enough" in the context of consumption and physical goods. "Enough" wealth doesn't really matter, its only a number in a database or a piece of paper until you spend it.
Not only that, but it’s important. Needless to say I am not comparing net-worths :) My rent spend started increasing around 4-5th year (steeply) of starting my first job and I saw it and kinda stopped/curbed it at somewhere like 7th year. It has remained there (give or take) because it had reached a really good level (below luxury or ultra premium so to speak) wrt my city’s general rental trends and spends (of course inflation factored in). It’s been 8 years since and I have been without a job for last two years (a bit by choice, if certain things can really be called choice) and pretty much my other spending trends also kinda plateaued around those years (experience spends kept going up slowly but I find them easier to manage). I can’t explain how much it has helped me when I have been living on savings for straight 2 years now. Not just the specific relative smaller amount but more so the predictability of it.
To a certain extent this is true. You shouldn’t be going into debt just because your income level allows you to get more loans etc. But once you reach a certain income threshold it doesn’t really matter.
So what was the point of him living a frugal, simple lifestyle? I would argue that its just something he was used to and found joy in, and thats ok. Some people like that. Others might want to use their money to unlock new experiences that come with it. Thats ok too.
Sure, and of course the elephant in the room is overconsumption and planetary overload, which get unlocked too on a bigger scale as a result of similar thinking.
Which ends does unlocking potentially endless ”experiences” serve? Our personal disconnect from nature is not separate from our collective disconnect from nature.
>Very few people know what "enough" means to them.
Does this ultimately come down to Taste?
It is hard to judge what is enough. While a Civic is a perfectly good car, it certainly isn't the safest, nor does it have the best riding experience. Once you get into attention to details, what is "enough" often means mediocre.
I want "good enough" from a crazy perfectionist. Like Steve Jobs' Apple.
I don’t disagree, I just don’t think “living in the same house for decades” qualifies as a clear signal of living simply. It could just as easily be a front or compulsive frugality. Or a really nice house to begin with. For instance, there’s no way my family would fit in the first house my wife and I bought. And we couldn’t have afforded our current house back then, either. It’s also worth noting that 60+ years ago was a very different house-buying experience. So I don’t think there’s much to learn from the fact that Warren Buffett bought a house back then and still lives in it, other than that it worked out for him and he’s not flaunting his wealth for whatever reason makes sense to him.
His inspiration is a big reason why I still drive my 1993 Honda Civic after owning it for 15 years. I bought it for $1000 after graduating college. I say a little prayer every time I turn the key that it actually starts. I gave it its own github repo where I track the maintenance I do on it. It reminds me where I come from, and that I don't need shiny shit to be happy. I believe this to be a virtue.
My girlfriend years ago thought it was incredible and amusing that I was working a fancy tech job and drove this old car around. We are now happily married.
These days, I could buy a Bentley with cash. But I don't need one.
Warren Buffet's example is an inspiration that should be followed by more people who go into debt buying crap they can't afford with money they don't have in order to look rich.
Driving a car that old puts yourself and others on the road at greater risk due to lack of safety features compared to a modern car. One could argue being able to afford a new car and not buying one to extoll other virtues is neglecting your own and communal good.
If you’re afraid to carefully drive a high quality and well maintained older car that was designed from the ground up with safety and quality at the absolute forefront- say an 80s Mercedes or Volvo, you would benefit from relaxing a bit and being willing to take slightly more risk in life.
Besides, I am not wholly convinced that improved safety tech is a replacement for the type of safety first engineering used in every tiny detail of those old cars, that mitigate certain types of accidents and injury that won’t be addressed in crash testing.
Back-up cameras are really important for kids who can't be seen in a rearview mirror. Those can be retrofit into an older car, but after having a kid I can see why these became mandatory.
A well designed car and proper driving technique make a backup camera unnecessary.
Many old cars have excellent rewards visibility without needing any camera- no camera will compare to a first generation Porsche Boxster with the top down for example, where you can directly see behind you by looking back. Volvo wagons are great like that also.
I also, as a rule never back anywhere that I haven’t seen directly just a few seconds before. I always back into parking places so I can see them facing forwards and not back up when starting out, and if I do need to back up when starting out I walk behind the car and look around first and then immediately get in and back up.
How is a toddler going to get behind my car before I can get in it that I did not notice was nearby and start visually tracking from standing there? How is a backup camera going to help when I backed into the spot and am now pulling out forwards? That’s just not a realistic concern. Also, backup cameras cannot see much closer to the wheel than those cars I mentioned with good visibility.
Tech really won’t help you here- safe driving requires looking where your vehicle is going with your own eyes. The field of view of a backup camera is insufficient- even if you have one, it’s usually better to be looking directly behind you and not use it. I see cars with backup cameras and sonar hit each other in parking lots all the time, because they thought the camera was a replacement for looking and situational awareness.
No backup camera will let you observe the nail the wind blew close to your tire to puncture it soon as you move the car. Perhaps it is best if I just stay home.
I have not yet flattened a kid with my car, but I suppose there's still time. Also backup cameras are very important for today's vehicles which are gigantic monsters compared with cars of the 90s. My car is quite low to the ground.
Also, show me the stats on how many toddlers are pancaked by lack of backup cameras each year per capita. That will inform me about how truly "important" this problem supposedly is.
Safety features like tracking where you are, and requiring a subscription for seat heating ?
I just think the everything connected to cloud approach sucks, but Im communal danger now.
I was driving a 30 year old car for a while (Miata). I'd say I was pretty low risk as you tend to go slowly in classic ones so things don't blow up. Also the small size reduces the risk to other road users compared to driving a massive suv or some such.
I phrased it like this to a friend who was looking to buy an upgrade to a relatively new car: "What I paid you $1000 a month (his new car payment) to drive the old car?" When I put it in that perspective, he drove that car for quite a while longer.
Personally, I buy new, and keep putting my car payment into a savings account once it is paid off. If I can't afford to put that money into savings, I can't afford a new car payment. I'm only allowed to do non-routine repairs from those funds. It's amazing how much you don't want to crack into that for a car once it grows to a few thousand. It's the most powerful visual impact of savings I've come across.
Car payments have a way of disappearing into an upgraded lifestyle when you don't have to make them, and then they come out of savings when you take a loan for the car.
Honda Civic may be the ultimate car for that. I bought a pickup 8 years ago that I hope will be a 20 year car. Buy something with a reputation for 200k+ miles.
+1, I am by far the most financially successful of my circle, and I drive the cheapest car (a used Fiat Punto) and have sort of the cheapest house (albeit it's bigger it's not downtown).
Don't buy yourself a Bentley, but you really ought to buy yourself a newer car that supports comma.ai. You don't get points for making your own life worse unnecessarily. Necessarily, sure, but don't make a sport of it.
My life is better driving a car that is simple and fun, where I feel alert and connected to the road and every function is controlled by me deliberately and manually. Ideally something with no screens, a manual transmission, and no power steering. Being chaperoned by AI is infantalizing and boring.
Are they truly happier, in the sense of being more content? Or are they just deriving more temporary pleasure from the hedonic treadmill they're on?
You can probably tell which one it is, by how long their happiness with their house / car / TV / fill-in-the-blank lasts, before they start thinking about trading up to an even nicer fill-in-the-blank.
Buddhist monk Matthieu Ricard wrote a great book on happiness, here's an excerpt I enjoy which talks about the difference between pleasure and happiness, in two parts. [1] [2]
Fair enough on the personal decision part. I'm less interested in telling people what to do and more interested in whether the premise ('nicer things = happier') actually tracks with how human satisfaction works. The research suggests it often doesn't, which seems worth knowing regardless of what you choose to do with that information. [1]
I would recommend the recently published book The Art of Spending Money by Morgan Housel, or check out the interviews he's done in recent months on it:
It's not about being frugal or cheap or spendy, but on recognizing human psychology and what actually brings most people happiness. See also the 85-year Harvard study on the topic:
Maslow's hierarchy of needs would assume that there is a point beyond which extra material comfort does not make you happy or content, but it also is quite clear that there is a point at up to which it does. Most books on happiness are written for people who are long past the point where increasing their monetary inputs will increase their happiness and contentment, but it is also clear those people exist and are perhaps even in the majority of humanity.
I really don't like this moralizing but more importantly there's increasing evidence that wealth does correlate with life satisfaction.
> The data showed the happiness gap between wealthy and middle-income participants was wider than between middle- and low-income participants.
And the apparent reason:
> He said: “A greater feeling of control over life can explain about 75% of the association between money and happiness. So I think a big part of what’s happening is that, when people have more money, they have more control over their lives. More freedom to live the life they want to live.”
Sure, but I’d argue that it’s largely reduced stress rather than raw materialism. For example being able not to worry about paying both the electric bill and a child’s dental work this month.
There’s many other research that corroborates this view. After some point increasing income didn’t increase life satisfaction. Usually somewhere in the low upper-middle class region.
> After some point increasing income didn’t increase life satisfaction. Usually somewhere in the low upper-middle class region.
That's the common assumption that this research repudiates.
> These findings are counter to a widely covered 2010 study that found happiness rises with income, but plateaus at around $75,000.
He studied much richer people:
> Killingsworth also used data from the ultra-wealthy (people with a median net worth between $3m and $7.9m), which is often lacking and difficult to obtain.
> The data showed the happiness gap between wealthy and middle-income participants was wider than between middle- and low-income participants.
> His study also found wealthy individuals were “substantially and statistically significantly happier than people earning over $500,000 each year”.
> Are they truly happier, in the sense of being more content?
The biggest thing anyone can do in their life is figure out exactly what makes them happy, and spend their money there. Don't let society tell you. People on this site likely care about computers and spend a disproportionate amount of their money on them, and that's ok. I don't care about cars or TVs, but I care about experiences and comfort so will spend money on travel and upgraded plane tickets.
I also care about agency, so tend to save money rather than spend. I want the freedom it provides more than what it can buy - typically.
Yeah but what is meaningfully "nicer" becomes and exponentially more expensive and ends up being mostly wasted value. And by time someone has to start actually worrying about such questions they have enough free capital to spend that they can have a high quality version of almost anything anyone would want to possess or use other than pure displays of wealth.
Maybe if the basic needs on the average person were taken care of then random displays of extravagant wealth would be acceptable. But when something as simple as getting a rotten tooth extracted or a filling on a front tooth is too much "luxury" for many working class citizens, it is a complete misallocation of society's resources.
I'm happy right after I eat ice cream too. Doesn't make it a good lifestyle.
Before you go on about how saying it's "good" or "not good" is a value judgement that I'm not entitled to make -- you're damn right it is, and I'll do what I want.
My 14" portable CRT I had when I was a teenager gave me joy every time I used it. My first car cost me less than 2k and gave me joy for 5 years.
You are now unable to get joy from a TV smaller than the largest one you've ever bought. Many people are unable to get joy from a car costing under 10k, let alone 2k.
It is actually the opposite. The less things you have, the less things you will want.
I even experience this with food. If I am on a strict diet for 2 weeks and then have a "cheat" meal, a previously normal meal feels like a satisfying feast.
If I splurge on food for 2 weeks, even 3/4th a pizza doesn't satisfy. I just want the other 1/4th.
It is really why we have so much wealth as a society but so much discontent. It is like believing there is some amount of alcohol that would satisfy the alcoholic. It just grows the desire for more while contentment is harder and harder to achieve.
I am pretty sure this is just a property of the dopaminergic system.
> You can buy a bigger and bigger house car tv stereo whatever
> But you can do that without any money.
Well...
Material things can contribute to happiness, or detract.
Balancing the things we spend our life on, relative to an understanding of what makes us happy, is going to be an idiosyncratic exercise. Assuming that X won't contribute to the happiness of person Y is some deep projection.
There seem to be many kinds of happiness too. Would I remain happy if I lost my house? Yes. I have gone through enough ups and downs to know that. But would I feel as fulfilled? No. I have gone through enough ups and downs to know that.
It's true (I live in Omaha). He is still in the same house.
I didn't grow up here—my wife did. Very early on, when I first visited Omaha, she drove me by his place. After three decades or so in California, I retired and we moved back to her hometown. Buffett is still there.
I went by it a few weeks ago. There's a gate on the driveway, and I assume some kind of security presence. Probably no different than anyone under constant public scrutiny.
I own several and have ridden thousands upon thousands of miles.
When I got my first bike as a kid, a cheap "mountain bike" with 24" wheels that probably weighed more than my current road bike, I was at maximum happiness. I was not at only 40% happiness because it didn't have a carbon frame or a Di2 groupset from the future. I was at 100.
Later when I got my first road bike I was at 100% happiness again. But nothing can make me happier than I was with that first, heavy bicycle-shaped object. It might equal it but it's impossible to surpass.
Nowhere did anybody say “moving house for any reason is bad”. Buffet could’ve moved if he wanted to, I presume. So, evidently, he didn’t have any of those ‘other reasons’. What we *can^ say is that he didn’t move, which shows that he didn’t allow lifestyle inflation to extend to his place of residence.
No they said we can all learn from it. I understood the implication, I just reject the stated idea that that lesson is to “live in one house for your entire adult life”.
> You can buy a bigger and bigger house car tv stereo whatever, but it will not make you happy.
Hard disagree here.
Ask a 4 person family stuffed into a one bedroom condo if buying a larger 3 bedroom home would make them happier, I'd imagine to 99.99999% of them the answer is yes.
I upgraded my road bike 2 years ago from an entry level one to a nice racing bike and each weekend I ride a 100km route, that sure as heck makes me happier than riding the old slower and heavier bike.
We just took our extended family on a vacation for a week. Money sure as heck made us happier in that instance.
It is true that cash can't fix all issues in life but any one who says money can't make you happy is either lying or doesn't have money.
Run a simple thought experiment in your head. If you woke up tomorrow under crushing credit card and medical debt and it was suddenly paid off, would that make you happier?
Meh. If you have the resources, buy whatever makes you happy.
If a bigger house makes you happy because you have space for your hobbies and you don't need to fight with your family members for space, buy a bigger house.
The whole "money doesn't bring happiness" thing is bullshit unless you are a Buddha.
A mansion in Malibu isn't going to make me happy, because I wouldn't know what the hell to do in Malibu. An upgrade from a 2-bedroom to a 4-bedroom home with a garage so I don't have to smell laser cutter fumes anymore and hack a ventilation system out a bedroom window? That very well might.
> An upgrade from a 2-bedroom to a 4-bedroom home with a garage so I don't have to smell laser cutter fumes anymore and hack a ventilation system out a bedroom window? That very well might.
As someone who upgraded from a 2 bedroom flat to a 3 bedroom house with a garage, I concur. Having a place to store my bikes and other “dirty” tools that’s not inside was such an improvement to my quality of life that I tell people to always look for a half decent garage when they buy. Especially if they also like cycling!
The key to a happy life is to learn how to reduce the amount of things you own and how to build strong relationships. Once you have enough to put a roof over your head and food on your table, more than that can only be used to purchase increasing amounts of comfort, which is not the same as increasing amounts of happiness.
YouTube has plenty of videos of people calling in with hundreds of thousands to millions of dollars a year in income and somehow they are still broke and in debt. Live below your means, save the excess income into an investment portfolio, keep doing that until you have enough money to live off the interest. Don't even think about buying a Rolex until you have so much money coming in from interest that you don't even know what else to do with it. Even then, remember that the Rolex, like anything else, requires maintenance, but that if you make someone else happy, they can take care of themselves.
>>Here are some things Buffet has done that I admire (notice that phrasing):
Perhaps the best thing Buffet has managed to do is to live long. Most of compounding magic begins at ages 60-65, a time where most investors start to die out.
Second best thing he did was to start/acquire a insurance firm. The 'float' helps them to run a kind of in house index fund on other peoples money, without having to pay TERs/Fees. Thats basically no effort bogle style compounding. Even if you end with a situation where you have to return ALL the premiums collected, you still get to keep the returns.
Other wise everything else is just fairly normal, if you are sitting in front of charts for long, its impossible to miss something that's going up on a weekly timeframe for long periods of time. You just pyramid upwards and wait, patiently.
The real issue is waiting doesn't work too well for most people as you start to die out after 60.
> Most of compounding magic begins at ages 60-65, a time where most investors start to die out.
Percentage-wise, few wealthy investors are dying out at ages of 60-65. In the US, males that make it to age 60 have a life expectancy of 81-82. But that's across all men - life expectancy is strongly correlated with wealth in the US, so a man in the top 1% could very reasonably expect to live to very late 80s/90s.
Nevermind that Buffet was still fabulously rich when he was 60, so none of your logic makes any sense to me.
Nobody doubts how compounding works. They doubt the logic of using that to argue that someone achieving a sustained CAGR of nearly 20% over decades and being recognised by peers as the greatest money manager of the twentieth century when he was already one of the world's richest man in his sixties actually achieved "fairly normal" performance mostly down to living a long time.
I think people who are looking at long term wealth building are better off looking at John Bogle's work. The key is this, you absolutely must stick to investing in the index as a whole, but the issue there is fees you pay is a percentage of your investment, even if small, over years compounds against you. That might look small, but its a double digit percentage if done over decades. Hence picking a fund that charges you the lowest is the key.
Buffet does this better. He basically takes the float from insurance business(Geico) and invests in the index his company manages. This basically sets you up for a long compounding cycle. Translation- You are basically investing in the US economy.
Apart from this there are some base businesses in an economy that's under long term multi year climb. Now anybody who is staring at stock charts(weekly) will tell you eventually you do learn to 'Pyramid upwards' on stocks that are clear winners. Lots of literature has been written on this.
All said and done, you can be rest assured there only at best 10 such stocks in any economy. Once you find them, you do periodic audit if the companies are holding up good and just keep putting in money as time passes.
I don't remember where- but I remember reading, Fidelity found out the most profitable accounts belonged to people who were dead. That says two things. 1) You have to hold stocks for long periods of time, like really long periods of time(Index, and some of its constituents that are carrying most of the freight) . Most people won't make it. 2) Live long enough.
Quite literally once you gain the skills to pick stock. Next single biggest skill you can master is to be healthy and live long. These things take lots of time to work.
Buffet was richer than most nonagenarians put together in his fifties, and has been consistently generating 6x the US economy's growth over long periods. Insurance float is a neat source of capital if regulators will let you put it into equities and six decades of return usually beats four, but it's bizarre to pretend that BRK's outlying returns compared with other financial institutions come from longevity and access to capital. On the contrary, others have typically started off earlier with more, and generally donated rather less than Buffet over the last couple of decades...
The "index funds and live long" advice is sensible precisely because even the average savvy investor isn't likely to time value investments as well as Warren Buffet did.
Index doesn't go up. Individual stocks do. I mean a small section of the stocks within the index contribute to most returns. This is of course different in a bull market where lots of them go up at once. But even in choppy and bear markets, its a small section of stocks that do most of the upward movement.
You need to study index carefully, like pick each stock and study it. You will see Buffet isn't exactly investing outside the index, his investments come from inside the index.
You are not looking for needle in a haystack here. More like a thick loaf from a pound of bread. If you squint enough, you find them.
> - He still lives in the same home he bought when he was 28 years old.
Really makes me wonder what drives him. For many people it's the money, but with him it doesn't seem that way. But I haven't read too much about him, so if anyone has insight I'd love to hear about it.
Read his biography - "The Snowball: Warren Buffett and the Business of Life". It's quite long but pretty accurate picture of the man and what drives him. His answer was always that he just loves what he does and he does it with people he loves (Charlie). One can hardly ask for more in life.
Yeah, from the outside it seems like he has lived exactly the life he wanted to. I only know one person like that, and have always tried to learn from him.
For some people, money is not for buying things, but just for keeping score. That can make it rewarding and addictive to accumulate money, even if you don't buy anything (like a giant house) with it.
The score keeping aspect makes it interesting, just like playing tennis while keeping score is more interesting than just hitting a ball back and forth across the net without counting.
Yeah, I kind of agree. I read Andrew Tobias's (did I get the apostrophe right?) book on investing and he made a point very early on: the people who are rich like money. No, not like you and I like money, they like money the way you and I like fishing, or reading, or hiking or whatever. It's their hobby, their love, the thing they like to learn about, read about…
Warren Buffett wouldn't be where he was if he wasn't obsessed with money. But to your point, that doesn't have to translate to material goods: the bigger house, yachts, etc.
Maybe he just likes building things that others find useful.
When I was younger I rented furniture from a company called CORT. I happened to notice on the contract or receipt or something, that it was a Berkshire company (I didn't know that before then).
If I were Warren Buffet, I would have been happy to know that someone was a satisfied customer of one of his companies. I got some decent furniture for a few months at a reasonable price.
Just like I'm happy when someone is a satisfied user of my software.
For some people, money is not for buying things, but just for keeping score.
You can see this behaviour in online multiplayer games that have a currency aspect --- some people will spend almost as quickly as they earn, while others will save some and buy items as they can afford, and then there are those who will just keep saving and saving, rarely buying.
Homes and physical community are a pretty personal thing.
Also, given that he is a billionaire, I do kind of assume that he has paid money to upgrade his home at some point, probably also owns additional homes elsewhere, maybe has done other things with his vast amount of money that normal people don't do, that are still consistent with living at the same address as when he was 28.
I agree that more personal growth can be taken from reviewing other's behavior rather than analysis of their "overall morality". However, when people are powerful and their actions effect many people it is very important to reflect on the morality of their actions.
Holding powerful people and institutions to account for the morality of their actions can and has been a powerful force for good.
The house he bought at 28 is 3500 square feet in a very very nice neighborhood and was worth $1.2 million a few years ago. It's humble by billionaire standards, not by average person standards. He never needed to size-up because of children, or size-down because of a bad economy, he was already set for both space and finances. Let's not create a moralistic myth out of his lack of need.
No, he's really humble, guys, trust me. He has only owned JUST ONE private jet in his life and has upgraded it only ONCE guys. He also currently owns the world's largest private jet operator NetJets [0] via Berkshire that he uses regulary to leverage its fleet now. I'm dying in the light of this humility.
That's a much better set of photos. It also confirms he was content with a two-car garage.
It also stands in contrast to the other celebrities and business leaders featured on that site. If they had a ranking ordered by size/value ascending, I wonder what number he would be. I still suspect it'd be near the top.
Question: does it make you a saint if you don't spend money lavishly when you have it? Note: its only about not spending it, not about donating or otherwise using it for an ethical purpose.
You say "it's humble by billionaire standards" - I think it's relatively humble by ~$300k a year standards. The thing I love about this house is that I think it represents just about the maximum real utility one can get from a home.
He had 3 kids, and a 3500 sq ft house is, IMO, an extremely average size for any decently paid professional where I live with a family that size. It basically looks like something that had everything he needed, and anything beyond that that you so often see in rich people houses is just for show and bling.
It's insanely humble by billionaire standards. Any FAANG SWE over 30 or so in the United States can get that. Contrast with multiple compounds, entire islands, etc.
Buffet surely made lots of upgrades and has added plenty of material comforts.
But it is quite possible to be a kind of lazy where even 10-20x current wealth, people would live where they currently live. American neighborhoods are reasonable that way. It is just primary home and they would holiday/vacation wherever.
It is highly unusual for someone to stay put after their net worth increases tenfold. Normally, you would expect an individual to seek out more elite social circles and embrace a significantly more opulent lifestyle. Not having that isn’t a sign of laziness (one can be certain that someone like Warren Buffett lives exactly as he chooses) but rather a reflection of the rare ability to decide that what he has is already enough.
That’s not far off the current median home sales price in San Francisco and easily the median home price in many, many upper middle class neighborhoods across the country.
How many households in the US can afford a $1.5m home? Assuming they need $400k then we can see that that’s a 95th percentile household income in the US, which translates to about 6 million of the US’s total 135 million households.
Redfin has data showing about 8 million homes are worth $1 million plus, so 5 to 6 million households at the $1.5m mark seems about right as an estimate - or put another way - about 5% of US households could afford Warren Buffets home (but maybe not on a 95th percentile income in Omaha, Nebraska).
How many days a year did Buffet live in that house, though? I suspect he was always on the move such that the home base never actually mattered. Same as Musk.
Which is extremely important. It's important to call out highly immoral behavior and lifestyles. Being a billionaire by itself is highly immoral. These people sleep like babies while people starve to death.
> He consistently communicated with shareholders of Berkshire in a straight-forward and transparent way in his letters and annual reports.
If we're going to assign moral value to people based on their wealth (a classic logical fallacy), then I think you need to take a look in the mirror.
The global median income is $2,760 annually. You sleep like a baby making likely 10-100X that, all while people are starving to death.
What are you doing to help the starving poor with your vast wealth? Are you not also morally bankrupt yourself, using your own logic?
While you're joining the current bolshevik revival that the populist left is trying to spin up, I just hope you remember the kulaks (the land-owning peasants) and many of the Serednyaks (the middle class peasants) also got murdered in the revolution. I'd keep any claims of moral superiority to myself if I were you.
Sorry but I am not retarded enough to compare my income to a billionaire gaming the system while half of my salary is taken to help exactly the people who cant afford life themselves. The world would be a much better place if billionaires got taxed as much as regular people. By percent not in absolute numbers obviously.
The vast majority of billionaires don't get wealthy by 'gaming the system' and if that were the case and you simply could just game the system, why isn't there more of them?
Also, you still haven't explained how you're morally superior by being in the top 10% of global earners vs. the top .01%, while people are starving. Using your logic about how you think the world works, you've clearly gamed the system to take more for yourself.
Billionaires are subject to the exact same tax laws as you. What you're likely referring to is the discrepancy in taxation of capital gains vs. income and the use of debt to borrow against assets.
But you then have to contend with the fact pretty much every successful country in the world taxes capital less than income at a certain point. And nobody taxes debt. Why? Because it incentivizes risk taking and investment in businesses (a value multiplier) vs. the non-scalable activity of selling your hours as an employee past a certain point.
What you perceive as "immoral" activity (investment and entrepreneurship) is the risk-taking that makes the economy function and grow, which benefits everyone.
Even your perceived socialist utopia, the Nordics (where I live) taxes capital gains less than income. I think you may want to investigate whether this is a Chestertons fence before loudly shouting about remaking the world on an emotional impulse and calling me a bootlicker.
... which makes the need for rent control and renter protection laws obvious. When people have the "choice" between paying their landlord 5k more just because the landlord can or spending 5-10k on finding a new home and moving, landlords have all the cards.
SF and NYC are the only two places in the US where rent control makes any sense whatsoever. And it's to solve a problem that was largely created... by rent control.
That said, it makes me a little sad that we've read the last of his annual letters.