Warren Buffett is the third richest person in the world with a growing net worth of $62.1 billion. Most people can’t fathom this type of wealth. Some might buy an extravagant house on a private island, amass a collection of expensive cars and spend the rest of their lives traveling the globe. Living frugally and pinching pennies probably wouldn’t be a consideration.
But Warren Buffett is not your typical billionaire spender. While he’s built a hefty portfolio of investments over the years, he’s also cautious and sensible with his money.
How Buffett spends his fortune might surprise you. Here’s a look at 20 purchases he’s made over the years.
1. His Omaha Home
You might expect Buffett to live on a sprawling estate with ocean views worth tens of millions of dollars and own properties scattered across the country. Instead, his house is a modest property in Omaha that he purchased in 1958 for just $31,500. Buffett told CNBC and Yahoo Finance’s “Off the Cuff” that he’s never had “any great desire to have multiple houses and all kinds of things and multiple cars.”
2. Berkshire Hathaway
Berkshire Hathaway started as a group of textile manufacturing companies dating back to the late 1800s. Buffett began buying shares in the company in 1962. He eventually became its largest shareholder and took control of the company in the mid-1960s. Berkshire Hathaway evolved into a holding company, or a company created for the purpose of buying Buffett’s investments.
3. 2014 Cadillac XTS
It’s not unusual to see billionaires driving Lamborghinis, Rolls Royces or Bentleys that they trade in for newer models every couple of years. This isn’t the case for Buffett. Up until 2014, Buffett, who prefers vehicles by Ford and General Motors, drove an eight-year-old Cadillac.
In a Forbes article, Buffett was quoted as saying, “I only drive about 3,500 miles a year so I will buy a new car very infrequently.” It was GM Chief Executive Mary Barra who convinced the billionaire to upgrade to a newer model after she highlighted all the features he was missing out on by driving an older model. He was sold. In 2014, Buffett replaced his 2006 DTS with a brand new Cadillac XTS.
Who doesn’t enjoy an ice cold Coke on a hot day, or on any day for that matter? Buffett, in a Fortune magazine interview, referred to himself as “one-quarter Coca-Cola.” But he wasn’t referring to his stock holdings with the company, which by the way was 9 percent. Rather, he was talking about his love for the beverage. He drinks at least five 12-ounce servings every day, or about a quarter of his daily calorie intake. On a typical day, Buffett said he has three Cokes during the day and two at night.
5. Wells Fargo
Wells Fargo is one of Buffett’s favorite companies and he praised it as one of his “Big Four.” In early 2015, Berkshire Hathaway increased its holdings in Wells Fargo by about 2 percent to 470.3 million shares. Buffett’s relationship with the bank began in 1989, and he’s gradually increased his holdings over the years. The most recent increase gives Buffett a 9.2 percent stake in the company.
6. Private Jet
Buffett’s life might not be filled with extravagance but he did splurge on a private jet. It’s “the only thing that I do that costs a lot of money,” he said in a CNBC article.
Don’t assume that Buffett uses his private plane to travel abroad and bask in luxury. The purchase was all about efficiency and saving time. “Berkshire (Hathaway) has been better off by me having a plane available to go and do deals,” he said. “It’s a plus. We’ve done things I would not have done if we hadn’t had a plane.”
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Buffett is an avid reader, but this doesn’t mean he spends his days buried in corporate financial reports. As a fan of nonfiction books and biographies, he told CNBC “Squawk Box” co-host Becky Quick about his “disgusting pile” of books by his chair. “I just keep going at them, and I never get tired of reading,” he said.
8. His Trusted Flip Phone
While most people have traded in their flip phones for a smartphone with internet capabilities, email access and many of the functions of a computer, Buffett has not. He showed off his Nokia flip phone during a CNN interview in 2013. “This is the one Alexander Graham Bell gave me,” he joked. “I don’t throw anything away until I’ve had it 20 or 25 years.”
9. Donations to Abortion Rights Organizations
Buffett is a liberal and is pro-choice. In an effort to lend his support as an abortion and reproductive rights advocate, the billionaire has donated $1.2 billion to abortion rights organizations from 2001 to 2012.
10. Car Dealerships
He already owns shares of General Motors and 78 auto dealerships in 10 states, but from the looks of it, Buffett could add even more dealerships to his portfolio. The Berkshire Hathaway CEO is open to the possibility of additional stores.
In remarks at an auto industry conference, Buffett spoke highly of the auto dealership business, saying, “It can be a good and very profitable business,” USA Today reported. “You’ll find out over the next couple of years we’re likely to make a few more acquisitions,” he said.
11. American Express
Buffett’s partnership with American Express dates back to the 1960s. He came on board and purchased his first stock at a time when the company’s shares were down. This was a great investment for Buffett. The company rebounded, outperforming the Standard & Poor 500 over the past 30 years. Berkshire Hathaway owned 14.2 percent of American Express at the end of 2013.
Everyone gets a haircut, even Buffett. Over the years, there have been reports of wealthy people paying big bucks to get their hair styled and cut at posh salons. Remember reports of former senator and ex-presidential candidate John Edward’s $1,250 haircut? Don’t expect that from Buffett. He reportedly only spends about $18 for a haircut, which he receives in an Omaha barbershop that’s located in the same building as Berkshire Hathaway.
Since Buffett is such as big-time reader, it probably comes as no surprise that his portfolio includes several newspaper companies. To date, Buffett owns more than two dozen small and medium-size newspapers. He recently added two more papers to his portfolio, the Martinsville Bulletin and the Franklin News-Post in Rocky Mount, Va.
14. Media Holdings
Buffett also has a stake in several media companies. In late 2014, Berkshire Hathaway bought 4.7 million shares in Rupert Murdoch’s 21st Century Fox. Additionally, the company increased its stakes in Charter Communications, DirecTV, Viacom and Liberty Global.
Buffett once said: “I eat like a 6-year-old.” And what 6-year-old doesn’t enjoy a cheeseburger, fries or most anything else on McDonald’s menu? Buffett isn’t afraid to eat on the cheap when many people with far less wealth spend big bucks for a meal. In an interview with CNBC, he said he held a McDonald’s card that lets him eat free at any of its restaurant in Omaha for the rest of his life. This card was the reason behind his family having Christmas dinner at the restaurant in 2007.
16. His Kids’ Foundations
Buffett is committed to giving away almost all of his wealth by the time he dies. As part of that plan, he makes a sizable contribution each year in the form of securities to his children’s and his late wife’s foundations. Donations in 2014 included:
- Susan Thompson Buffett Foundation: 1,658,551 shares valued at $213 million
- Howard G. Buffett Foundation: 1,160,981 shares valued at $149 million
- Novo (Peter Buffett): 1,160,981 shares valued at $149 million
- Sherwood (Susan Buffett): 1,160,981 shares valued at $149 million
17. Bill and Melinda Gates Foundation
In addition to making donations to those foundations, Buffett also donates a considerable amount each year to the Bill and Melinda Gates Foundation, which focuses on improving education and health and reducing poverty. Bill Gates is a director at Berkshire Hathaway and a good friend of Buffett, so it’s no surprise that his foundation gets a chunk of Buffett’s wealth. In 2014, the Bill and Melinda Gates Foundation received shares valued at more than $2 billion. In the last eight years, the foundation has received a total of $15.2 billion from Buffett.
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18. Kraft Heinz
Berkshire became co-owner of Heinz with the private equity firm 3G Capital in 2013. The partners recently purchased Kraft Foods Group, merging with Heinz and forming the new company, Kraft Heinz. This new company became one of Berkshire Hathaway’s largest investments, second only to Wells Fargo. Interestingly, Buffett was criticized for investing in companies that some say contribute to obesity. Given his love for Coke and McDonald’s, it’s safe to say he has no apologies.
19. Clean Energy
Buffett’s interest goes farther than company mergers and increasing his stock holdings. He’s also interested in the environment and climate change. Berkshire Hathaway Energy, a division of Berkshire Hathaway, Inc., has invested more than $15 billion in renewable energy and is targeting another $15 billion in investments, a company statement said. The company pledges to increase its wind holdings in Iowa by 16 percent and “retire more than 75 percent of coal generation capacity in Nevada in the next four years,” according to the Omaha World Herald.
Batteries are one item that might never go out of style. In 2014, Berkshire Hathaway struck a deal to purchase Duracell from Proctor & Gamble in exchange for transferring $4.7 billion in stock it owned back to P&G.