"Those are facts. Circumstantial evidence leads a rational person to question why such a high earning individual would live so shabbily relative to their claimed income, and question whether his living arrangements mesh with the claim that he's in the market for a new car."
From Warren Buffet's Wiki:
"In 1957, Buffett operated three partnerships. He purchased a five-bedroom stucco house in Omaha, where he still lives, for $31,500.I would suggest that there’s a world of difference between living a certain lifestyle by choice or out of necessity.
"In a sense, the game that I'm in gets more interesting all the time. It's a competitive game, it's a big game, and I enjoy the game a lot"
While Warren Buffett is famous for living in the same home he bought back in 1957, he does actually have another house, although he is currently in the process of selling it for a mere $11 million.
As for Warren Buffett’s lifestyle, this Investopedia article explains it:
Berkshire Hathaway CEO Warren Buffet has put his six-bedroom house in Laguna Beach’s Emerald Bay on the market for $11 million.
“For the first time in nearly 50 years the legendary ‘Oracle of Omaha’s’ home (at) 27 Emerald Bay is now available!” says the listing by Bill Dolby of Villa Real Estate.
Buffett, 86, has owned the ocean-view home since 1971, when he paid $150,000 for it. He’s used the house for family vacations for the past 46 years, Dolby said.
Built in 1936, the 3,588 square foot home in the guard-gated community has been renovated over the years. Most rooms have views of the surf and rocks, and five bedrooms have en suite bathrooms.Admittedly this second home isn't mentioned too often, presumably so as not to spoil the narrative of living in the same house exclusively for 60 years, but Warren Buffet did also sell another vacation home he owned in Laguna Beach, California in 2005 for close to $6 million.
As for Warren Buffett’s lifestyle, this Investopedia article explains it:
Buffett is also happy with what he has in terms of his modest standard of living. He isn't interested in a bigger house, a newer car or owning his own island. He simply doesn't care about the Joneses and what they have.Why not a mansion? - he was asked.
“How would I improve my life by having 10 houses around the globe? If I wanted to become a superintendent of housing … I could have as a profession, but I don’t want to manage 10 houses and I don’t want somebody else doing it for me and I don’t know why the hell I’d be happier.“
This house does just fine, he says. “I’m warm in the winter, I’m cool in the summer, it’s convenient for me,” he said in the interview. “I couldn’t imagine having a better house.”Another example is the founder of Walmart (Sam Walton) was famous for driving around Bentonville in Northwest Arkansas in an old pick-up truck and living his life just like everyone else in town.
In February, Buffett shared further non-materialistic sentiments with Charlie Rose. “I have every possession I want. I have a lot of friends who have a lot more possessions. But in some cases, I feel the possessions possess them, rather than the other way around.”
At the time of his death in 1992, he had a net worth of $8.6 billion. This Washington Post article from a few years before his death details his lifestyle and his attitude to being the wealthiest man in America.
Warren Buffett is an extreme example of the philosophy of living within your means, and no rational person knowing anything about him would question his net worth based on the fact that he hasn’t moved from his roots, and lives in a home that is perfectly suited for him.
Other billionaires are a little flashier with their lifestyles, Oracle’s Larry Ellison likes his planes and his racing yachts for example, but the book “The Millionaire Next Door” is essentially about how a person’s wealth is often not revealed by outward appearances.
Most millionaires do not live ‘millionaire lifestyles’. They live within (often well within) their means, frugally but not miserly, and don’t care about buying a flashy new car every year or living in the most expensive house they can afford.
I would however imagine that for most people, on attaining a certain level of wealth, a priority would be to invest in a home. It’s one of the best investments most people can make, and you have to live somewhere!
"The Millionaire Next Door" talks about UAWs (Under Accumulators of Wealth) and those who are PAWs (Prodigious Accumulator of Wealth).
On car shopping habits, the book concludes that:
I’m not talking about any one individual here, but for many people coming from backgrounds where they are not used to having money, the arrival of sudden relative riches can be hard to handle. There’s a reason why many lottery or pools winners or sports stars end up broke.
Life, if you’re lucky, is a long journey, and those wins or relatively few years of high income while you are at the top of your sporting career, have to last a long time. Invest, and let compounding be your friend. Spending on luxuries at the expense of your future is very short-sighted.
When I had my recent meeting to discuss preparedness for retirement, the advisor made it clear that there are two sides to the equation – your savings and future income are one side, but are meaningless without knowing your expenses on the other side.
Back to the topic of Laurence’s comment, and the question a discerning mind should be asking is does someone rent a house from choice or out of necessity? Does Warren Buffet continue to live in his home of 40 years from choice or out of necessity? I don't think any reasonable person would draw the conclusion that Warren Buffett lives there for any reason other than that is where he wants to live.
It’s also worth pointing out that the net worth of Warren Buffet is well established, although it probably fluctuates by the odd billion or two as the market moves. The accounts of his holdings are audited and can be relied upon.
This is not always the case, which is why we often have to rely on circumstantial evidence. Blog posts are the claim, not the evidence, and all I’m suggesting is that before giving anyone your money, perform your due diligence. Does the available evidence support the claim?
When it comes to selling religion / mediums / fortune telling or making easy money schemes, people tend to believe what they want to believe.
This blog simply encourages its readers to think critically before acting.
Warren Buffett is an extreme example of the philosophy of living within your means, and no rational person knowing anything about him would question his net worth based on the fact that he hasn’t moved from his roots, and lives in a home that is perfectly suited for him.
Other billionaires are a little flashier with their lifestyles, Oracle’s Larry Ellison likes his planes and his racing yachts for example, but the book “The Millionaire Next Door” is essentially about how a person’s wealth is often not revealed by outward appearances.
Most millionaires do not live ‘millionaire lifestyles’. They live within (often well within) their means, frugally but not miserly, and don’t care about buying a flashy new car every year or living in the most expensive house they can afford.
I would however imagine that for most people, on attaining a certain level of wealth, a priority would be to invest in a home. It’s one of the best investments most people can make, and you have to live somewhere!
"The Millionaire Next Door" talks about UAWs (Under Accumulators of Wealth) and those who are PAWs (Prodigious Accumulator of Wealth).
On car shopping habits, the book concludes that:
…a common UAW drives a current model car, purchased new, and may have financed it on credit. PAWs rarely purchase new model cars and are less likely to own foreign or luxury vehicles. An example from the book details a UAW that spent roughly 60 hours researching, negotiating and purchasing a new car. In the end, while the car was purchased "near dealer cost," in the long run the UAW's time and money could have been more efficiently spent creating wealth rather than collecting possessions notorious for depreciating in value. The authors contrast the story with a PAW who decided that the pride of owning a brand new car wasn't worth the $20,000 price difference.The book also talks about ‘million dollar choices’:
Some of the financial choices that UAWs make are considered to be “million dollar choices” because if the choice hadn’t been made, the UAW would have in excess of a million dollars. One example of a million dollar choice is to smoke. Smokers and drinkers tend to be UAWs because instead of building net worth, they spend their income to purchase alcohol or cigarettes.I can’t say I’m averse to the occasional pint or two as a social activity, but smoking is a ridiculous activity on many levels.
I’m not talking about any one individual here, but for many people coming from backgrounds where they are not used to having money, the arrival of sudden relative riches can be hard to handle. There’s a reason why many lottery or pools winners or sports stars end up broke.
Life, if you’re lucky, is a long journey, and those wins or relatively few years of high income while you are at the top of your sporting career, have to last a long time. Invest, and let compounding be your friend. Spending on luxuries at the expense of your future is very short-sighted.
When I had my recent meeting to discuss preparedness for retirement, the advisor made it clear that there are two sides to the equation – your savings and future income are one side, but are meaningless without knowing your expenses on the other side.
Back to the topic of Laurence’s comment, and the question a discerning mind should be asking is does someone rent a house from choice or out of necessity? Does Warren Buffet continue to live in his home of 40 years from choice or out of necessity? I don't think any reasonable person would draw the conclusion that Warren Buffett lives there for any reason other than that is where he wants to live.
It’s also worth pointing out that the net worth of Warren Buffet is well established, although it probably fluctuates by the odd billion or two as the market moves. The accounts of his holdings are audited and can be relied upon.
This is not always the case, which is why we often have to rely on circumstantial evidence. Blog posts are the claim, not the evidence, and all I’m suggesting is that before giving anyone your money, perform your due diligence. Does the available evidence support the claim?
When it comes to selling religion / mediums / fortune telling or making easy money schemes, people tend to believe what they want to believe.
This blog simply encourages its readers to think critically before acting.
On religion, Carl Sagan said that "Extraordinary claims require extraordinary evidence".
The standard of evidence required to back claims of trading success may not be at quite the standard required to prove a deity, but some ordinary evidence would be good.
No comments:
Post a Comment