HOW WARREN BUFFET MADE HIS FIRST MILLION DOLLARS | Marvin Germo

HOW WARREN BUFFET MADE HIS FIRST MILLION DOLLARS

By: Marvin Germo | January 31, 2019

Great things start from small beginnings

You’d definitely ask how in the world would a boy selling chewing gums, Coca Cola bottles, and delivering newspapers door to door everyday have a net worth of 82 billion dollars in his lifetime. Buffet wasn’t even born in an ultra rich family but good enough to at least kickstart his journey. His secret? Time and the ability to start early and deploy as much discipline to stick to his plan. Buffet, at a young age, was already engaged in different ways to earn money. It is not a surprise that he is worth 82 billion dollars now. So where did he begin? How did he make his first million dollars?

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Buffet was a Gumptious Kid

Warren Buffet is not your typical kid. During his first venture into the business world, he was selling chewing gums, softdrinks bottles, and newspapers. Other than these, Buffet bought used pinball machines for $25 each and put it in different barber shops until he sold it to a war veteran for $1,200. He was also making $175 a month for delivering newspapers at the age of 15. Buffet’s eagerness to earn a profit was influenced by his father who worked as a stockbroker.

Buffet Invested in Stocks as Early as 11 Years Old

Children nowadays spend most of their time playing with their smart phones and computer games. Buffet was different. His first interaction with the stock market was when he bought three shares of Cities Service for himself and for his sister, at the age of 11. This was followed by investing in his father’s business and buying a 40-acre farm at the age of 14. By that time, he had already $9,800 savings. His venture into the stock market did not stop here. When he graduated college, he planned to work in Wall Street and was able to meet Benjamin Graham, who became his mentor and influenced him to make a better career choice. That choice that changed his life forever.

Buffet Worked as a Stockbroker and Earned His First Million

When Buffet was told to make another career choice, he headed back to his home and became a stockbroker there. He started building investing partnerships. When these partnerships expanded, he began to earn more until he reached his $1 Million at the age of 31. After that, he decided to directly invest in businesses like a windmill manufacturing company and bottling company where he invested his $1 Million. Then he looked for bargains in the stock market until he found the Berkshire Hathaway. He started buying its shares and later on took control of the company.

Buffet is More Focused on Long-Term Investing Rather Than Short-Term Trading

One of the takeaways we can get from Buffet is that it’s best to buy good and growing companies that have a durable competitive advantage and leave it for a long period of time. To Buffet, long-term investments would yield more than short-term ones. This was a lesson learned after he sold his first stocks in Cities Services when it fell down from $200 to $40 per share. Little did he know that it could have more than quadrupled his money if he had kept his investment.

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