Warren Buffett is the third-richest man in the world. He therefore commands a fortune that is beyond the wildest dreams of most people. As of May 2019, his net worth is actually a colossal $85.2 billion, which is more than the gross domestic product (GDP) of hundreds of countries. Buffett of course gives a lot of money away right now, as he’s a noted philanthropist. But the sheer size of his wealth raises an important question: what will happen to those billions of dollars after Buffett dies?
So how did the multi-billionaire earn his fortune? Well, Buffett has essentially spent his whole life building up his riches. When he was just seven years old, for instance, he picked up a book from the public library called One Thousand Ways to Make $1,000 – and the tome captivated him. The young Buffett then started looking for ways to make his own money. And to begin with, he sold magazines, drinks and gum to his neighbors.
Buffett subsequently worked at a series of odd jobs, and his savings continued to grow too. Then, at the age of just 11, the businessman began buying shares. And a few years down the line, Buffett actually bought a whole farm after reaping the rewards of putting cash into his father’s company. So the money was already flowing in. But Buffett next went to college at his father’s insistence; and by the time he was done at the educational establishment, the young entrepreneur had amassed $9,800 – the equivalent of just over $100k in today’s money.
Yet Buffett’s father also insisted that his son got a university education. So in 1947 the young man started attending the University of Pennsylvania’s Wharton School. Buffett then stayed there for two years before transferring to the University of Nebraska-Lincoln. Then, in a move that the institution no doubt regrets, Harvard Business School actually rejected the budding entrepreneur.
But after that rejection, Buffett decided to next attend Columbia University. He in fact selected the Columbia Business School because a hero of his, the economist and investor Benjamin Graham, taught there. Graham, who died in 1976, is known to this day as “the father of value investing.”
So under the tutelage of Graham and others, Buffett learned what he would come to use as the principles of his career. “The basic ideas of investing are to look at stocks as business, use the market’s fluctuations to your advantage and seek a margin of safety,” he once famously said. “That’s what Ben Graham taught us. A hundred years from now, they will still be the cornerstones of investing.”
And by 1962 Buffett’s investment successes had turned him into a millionaire. The entrepreneur also took over the textile company Berkshire Hathaway, which he then gradually repositioned into an insurance business. But Buffett didn’t stop there, as he further acquired shares in major companies such as ABC, the Washington Post Company and the Coca-Cola Company. There were a few bumps along the way, of course, but seemingly many more wins than losses.
Buffett had married a woman named Susan Thompson in 1952 too. Reportedly, though, his future father-in-law didn’t think much of him at the time. Buffett told CNBC in 2017, in fact, that after he’d proposed to Thompson his future relation told him, “My daughter may starve to death, and you’re going to fail.” Yet the man seemingly didn’t blame Buffett, but rather the government of the day. “My father-in-law was the most conservative guy in Nebraska, except maybe for my dad,” Buffett reminisced.
Thompson and Buffett had three children together in the 1950s: Peter, Susie and Howard. Their marriage would prove to be an unconventional relationship in the end, however. In 1977, in fact, Thompson ended her relationship with Buffett – but didn’t divorce him. She also introduced him to a friend of hers: Astrid Menks.
Buffett and Menks then started dating – even though Buffett and his wife were still officially married. And despite Buffett and his wife often appearing together as a couple, Menks would sometimes come along with them. Reportedly, too, Christmas cards from the Buffett household around that time were signed “Warren, Susan and Astrid.”
Unfortunately, though, Thompson was diagnosed with cancer in 2003 and had to undergo treatment. By this time, however, Buffett was not a millionaire but a billionaire. He had, after all, slowly crept further and further up the list of richest Americans, seemingly slipping under the radar by keeping his private life out of the public eye.
So money was not an issue when it came to Thompson’s treatment, which was intensive – even including facial reconstruction surgery. Buffett and his wife later gave $6 million to cancer research in California too. Tragically, though, a different affliction took Susan’s life in 2004; she in fact died of a brain hemorrhage.
And Buffett was reportedly so devastated by his wife’s death that he couldn’t even bring himself to attend her funeral. Thompson would have inherited Buffett’s money had she been the surviving partner, of course. But instead her own money (a quite considerable sum) was dispensed to her survivors. Each of the Buffett children, for instance, received $10 million.
That wasn’t all. Each of her grandchildren were also given $100,000, and her friends were given sums of money amounting into the millions. But Thompson also ensured that her philanthropy, something to which she had been devoted in life, carried on after her death. Her shares in Berkshire Hathaway, which were worth $3 billion, were in fact left to a charitable foundation.
Come 2006, then, Buffett married Astrid Menks. He turned 76 on the day of the wedding, while Menks was 60 years old. The media took an interest in the marriage too. “[Menks] has been with my father all these years for all the right reasons,” Buffett’s daughter, Susie, told The New York Times in 2006.
“I’m so thankful. She loves him and takes care of him. If Warren didn’t have a cent, she’d be with him,” she added. Susie then explained the relationship of her parents and their companion. “Unconventional is not a bad thing. More people should have unconventional marriages,” she told the newspaper.
Her mother, Susie said, had essentially longed for her own space. Yet her parents had such deep feelings for each other that, according to Susie, they simply “didn’t need to be in the same room.” Menks had not been a third wheel, though; she was part of the relationship. “Astrid and my mother were very close — really loved each other,” Susie said.
A friend of the Buffett family, furniture maker Cedric Hartman, also commented to The New York Times. “They had a relationship that was so unusual, so fine and so sophisticated — all three of those people,” he said. “We all got to know Astrid about the same time… She was smart, good-looking and had personal style; she would have been a standout anywhere.”
The wedding, the media reported, was short and sweet and seemingly rather frugal. The ring came from a company owned by Berkshire Hathaway, for instance, and Buffett may have even got the employee discount, according to Susie. The ceremony itself lasted only a quarter of an hour, too, and afterwards the newlyweds and the guests went out for seafood.
Buffett is, in fact, quite famous for his frugality. This draws comment because it’s not necessarily what you’d expect of a billionaire. As a case in point, Buffett bought a five-bedroom house for $31,500 in 1958 and has resided there ever since. His daughter also told a BBC documentary team in 2009 that he’d even bought cars that were damaged to save money.
Buffett supposedly keeps things for a long time rather than throwing them away when they get old too. In a 2013 interview with Piers Morgan, in fact, the billionaire revealed that his cell phone was an out-of-date Nokia. “This is the one Alexander Graham Bell gave me,” Buffett joked. “I don’t throw anything away until I’ve had it 20 or 25 years.”
Buffett also claimed in a 2013 interview with CNN that he’d only ever composed one email. To modern-day entrepreneurs that might well be utterly baffling. Yet the money guru said the electronic missive in question was sent back in 1997 and that it was a detailed essay about why he didn’t use Microsoft – sent to one-time Microsoft exec Jeff Raikes.
It’s naturally almost impossible to tell how much money Buffett may have saved by living this cheaply. But there’s one out-going expense that people can easily track: how much money the billionaire has given away to charity. As previously mentioned, Buffett gives away vast sums of money to good causes. Sometimes he even auctions off dinner meetings with himself to raise millions.
And in 2011 Buffett was even given the Presidential Medal of Freedom for his good works. At the time, then-President Barack Obama praised him hugely. The billionaire is, Obama said, “not only… one of the world’s richest men but also one of the most admired and respected.” The president also opined that Buffett had “demonstrated that integrity isn’t just a good trait, it is good for business.”
Some of Buffett’s good works are actually done in partnership with Bill Gates, another famous billionaire. In 2006, for instance, Buffett donated the colossal sum of $30 billion to the Bill and Melinda Gates Foundation, which works to improve education and health around the world. Buffett is one of the trustees of the foundation, too, with Gates and his wife, Melinda, being the others.
In 2010 Buffett was also one of many billionaires to sign the Giving Pledge, which requires the ultra-wealthy to give at least half of their wealth to charity. Many famous names are on the list of signatures, including George Lucas and his wife, Mellody Hobson, Mark Zuckerberg and his wife, Priscilla Chan, and Elon Musk.
But who will inherit the money after Buffett dies? Well, the entrepreneur actually discussed this issue all the way back in 1986 during a conversation with Fortune magazine. In an article titled with the question Should You Leave It All to the Children? Buffett said that he wanted to leave his kids “enough money so that they would feel they could do anything, but not so much that they could do nothing.”
Giving them “a lifetime supply of food stamps just because they came out of the right womb” was a bad idea, Buffett claimed. In fact, the businessman described this as “an antisocial act.” He therefore said that he felt that “a few hundred thousand dollars” was a reasonable sum – but that in the end “love is the greatest advantage a parent can give.”
This philosophy has spread to other billionaires too. In 2017, in fact, Bill Gates was asked by Charlie Rose what he had learned from Buffett. “He wrote an article for Fortune magazine that I read before I met him about [how] it’s not necessarily a good idea to leave large sums to your children,” Gates said.
“So that was pretty fundamental,” Gates went on. “And I remember reading that, and I was convinced that that was right, and I thought, ‘Wow, now you have to think of how to give it away.’” Clearly, then, the statement had a massive impact, because the Bill and Melinda Gates Foundation has so far given away more than $40 billion.
Buffett actually spoke to Fortune again in 2006, and his plans hadn’t changed much. He said again that he and Thompson had decided as a unit not to leave too much money to the children. “When your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home – I would say it’s neither right nor rational to be flooding them with money,” he said.
“In effect, they’ve had a gigantic headstart in a society that aspires to be a meritocracy. Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level,” he said. Buffett’s belief has seemingly always been that the rich (including himself) have too much and should be taxed more in order to make society fairer.
In the 2006 interview, though, Buffett explained that he had given his children money so that they could create charitable foundations of their own. “What they’re doing with their foundations is giving money back to society,” he said. “I’m very proud of them for the way they’ve handled it all, and I have no doubt they’re going to keep on the right track.”
In 2018 Buffett also gave a speech at the Forbes 400 Summit on Philanthropy. There, he actually told the audience that he was going to let his kids view his will while he was still alive. “They have two things to decide. First: do they understand their responsibilities? And second: do they think that what I’ve done is fair?” he said.
Buffett then told the Forbes summit that he believed in letting children find their own way, no matter what path in life they want to pursue. “I’ve seen people try to steer their children, and the worst thing you could do is use money to induce given behavior with kids,” he told the audience.
Buffett apparently doesn’t believe in making kids go through college, either. After all, he himself hadn’t wanted to go. “I told my kids they don’t have to do anything… finish college, become doctors or lawyers,” Buffett told the crowd. “I told them to use their talents in whatever form they think will create the greatest net benefit to society.”
Buffett later explained what would happen to his company after he died too. “Every single share of Berkshire I own will be diverted into philanthropy ten years after my estate is executed for future philanthropists who can see future needs,” he said. “I might be able to think outside the box, but when the box is six feet under, I’m not so sure.”
At the moment, then, all of Buffett’s children have joined him in philanthropy. They each have their own foundation, in fact. Susie’s works towards equality in Nebraska, the home state of the Buffetts. It’s called the Sherwood Foundation – presumably referencing the legend of Robin Hood, who was famed for giving to those in need.
Meanwhile, Peter Buffett’s charitable body seeks to address gender imbalance in today’s society. Simply put, the NoVo Foundation seeks to invest in and support women. And last but not least, the Howard G. Buffett Foundation is devoted to helping people in impoverished areas globally.
So it seems that Buffett’s legacy is in pretty good hands. And in recent years, more and more billionaires have spoken out to say that they will be leaving their fortunes to charity, too, with only relatively small amounts going to their children. Hopefully, then, all of that money will be able to make a significant difference in the world.